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All posts for the day November 7th, 2013

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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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.