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All posts for the month November, 2013

Yield Measures (Fixed Income)

Posted by Bill Campbell III, CFA on November 10, 2013
Posted in: Level I Fixed Income.

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 […]

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Comparing Yield Measures (Quant)

Posted by Bill Campbell III, CFA on November 7, 2013
Posted in: Level I Quantitative Methods.

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 […]

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CFA® Level I Quantitative Methods Membership, CFA® Level I Membership

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Yield Measures (Quant)

Posted by Bill Campbell III, CFA on November 7, 2013
Posted in: Level I Quantitative Methods.

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 […]

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CFA® Level I Quantitative Methods Membership, CFA® Level I Membership

This will give you access to this and all other articles at that membership level.

FRAs

Posted by Bill Campbell III, CFA on November 7, 2013
Posted in: Level I Derivatives.

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 […]

This article is for members only.  You can become a member now by purchasing a

CFA® Level I Membership

This will give you access to this and all other articles at that membership level.