Financial Exam Help 123

Month: November 2013

  • Yield Measures (Fixed Income)

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    by

    Bill Campbell
    in

    There are a number of types of yield measures for bonds; you need to know how they are calculated, the assumptions that underlie them, and their strengths and weaknesses. The measures of interest are: Nominal yield Current yield Yield to maturity Yield to call Yield to refunding Yield to put Yield to worst Cash flow…

  • Comparing Yield Measures (Quant)

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    by

    Bill Campbell
    in

    The article on yield measures mentions five measures of interest: Bank Discount Yield (BDY, or rBD) Holding Period Yield (HPY) Effective Annual Yield (EAY) Money Market Yield (MMY or rMM) Bond Equivalent Yield (BEY) Unfortunately, you cannot compare these to each other directly; for example, if one investment has a BEY of 6.125% and another…

  • Yield Measures (Quant)

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    by

    Bill Campbell
    in

    There are a variety of conventions for measuring the yield (or return) on an investment; you need to know the definitions of each of these yield measures and how to convert from one yield measure to another (to facilitate comparison of various investments). The measures of interest are: Bank Discount Yield (BDY, or rBD) Holding…

  • FRAs

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    by

    Bill Campbell
    in

    A forward rate agreement (FRA) is essentially an agreement to enter into two loans (one long, one short) in the future: a fixed-rate loan and a floating-rate loan.  (The difference between an FRA and an actual agreement to enter into these two loans is that the FRA will be settled at the beginning of the…