Came across this question today in one of the mocks (i dont know which one) today
BEY=6.5%, Days to Maturity=180. Bank Discount Yield? Can anyone help?
EAY = (1+BEY/2)2 _1= 6.61%
EAY = (1+HPY)365/t _1 this implies HPY= 3.21%
MMY = HPY 360/t = 6.41%
MMY = 360 BDY/(360-BDY (t)) this implies BDY = 6.21%
whats the answer?
Perfect
thats a tricky one