Hey, I’m pulling my hair out over this, because I hate it when the CFA do this! The BEY in Quants is just twice the effective semi-annual yield, whereas it’s defined differently in the Corporate Finance section. I was just doing a Q and got completely caught out. What do you reckon the chances are that it will come up given there can be 2 answers?!

I remember that In Stalla I got a question wrong for the same reason. In fixed income one formula for BEY, in corporate finance another. Stalla used the one in corporate finance.

Seriously, BEY is in many different places and its not clear what to use. Could someone list all possible ones, and when to use which?

There’s only 2 times it comes up: Quants : It is just twice the effective semi-annual yield. Corporate Finance: Here, it’s defined as (Discount/Price)x(365/t) I can’t find any material which says which one should be used where! Guess it’s best to use the Quant definition in the Quant section and the CF one in that section! Good ole CFA…

Quants : It is just twice the effective semi-annual yield. (used for annuity or bond) Corporate Finance: Here, it’s defined as (Discount/Price)x(365/t) (used for T-bill, less than one year time, this is why you have 365/t) These are my thoughs

I guess if they don’t give you the semi annual, you will be using the second one.

Okay, now could someone tie BDY and HPY to BEY?