Hi All,

Quick question on converting a HPY to BEY.

If you were given a 90 day loan with 1.3% HPY - what would you calculate the BEY as and how?

My understanding would be…[1.013^2 - 1] x 2

To the power of two, to make the quarterly loan equivalent to a semi annual and them multiply it by two?

The textbook is using the following: [1.013^182.5/90 -1] x 2 which equals 5.31%. With my calculation I got 5.23%.

Thanks