This might be a silly question, but for some reason this popped into my head last night when I was in bed. Can you do a Bank Discount Yield measure on a premium bond? D/F x 360/t I don’t think it’d work because the ‘D’ would be negative…I’ve noticed that the only BDY calculation problems have been for non-coupon bearing bonds under a year, so maybe this would never come up…
Would never be the case as short term bonds with a term less than one year are usually zero coupon.
Interesting question. But in my humble opinion, as its name already suggest, it should apply only to bond with discount. Not bond sold at premium.