BEY

CFA Level I Quant
#1

Bond Equivalent Yield…

So i know there are two… but…

Below are some formulas. So which one is it? They give you different answers, and when do you know when to use each?

Thanks!

((1+EAY)^(.5) - 1 ) * 2

(Face - Price) / Price) * (365/days)

#2

Use

(Face - Price) / Price) * (365/days)

in Corporate Finance questions; use

((1+EAY)^(.5) - 1 ) * 2

everywhere else.

#3

I thought this was BDY, not BEY.

#4

Sorry, that would be fv=pv/fv, not price…

umm, how is this BEY? Wasn’t it termed something else? (Dnt remember)

#5

BEY = Face Value - PV / PV * 365/n BDY = Face Value - PV / Face Value * 360/n Where n is the days until maturity.

#6

Because CFA Institute says it is for Corporate Finance.

If corporate finance people really use this as BEY, then they’re either ignorant or stupid. Nevertheless, for the exam, on Corporate Finance questions, you have to be exactly the same amount of ignorant or stupid.

#7

I think you got it wrong. BDY is Face-Present/Face. It is the discn on FV. My two cents- Don’t mug thse formula up. Try and understand else you’ll screw up on the D-day. Though I am not the one who should be giving advice to anyone after such pathetic scores on mocks.

#8

okay.