Memorize or Derive Money Market Yield?

CFA Level I
#1

Hi Everyone,

So the money market yield can be derived from the bank discount yield (MMY = [360*BDY]/[360-(t*BDY)]). However I tried deriving it and looked at how others derived it, and it seems like it takes quite a bit of time. So I’m curious to see if you guys are planning to memorize or derive the formula. Should I memorize? Or is there a faster way to derive?

#2

I wouldn’t memorize the formula.

I wrote an article on comparing yields that may be of some help: http://financialexamhelp123.com/comparing-yield-measures-quant/

#3

@S2000magician I saw your derivation from other threads. It was a bit time consuming and hard to derive. But your article explanations make the calculations much more simple and clear, so I’m definitely going to follow your route. Thanks so much!

#4

My pleasure.