bond equivalent yield

chandniwadhwani92
Finance Junkie
Posts: 166
Joined: Mon Oct 06, 2014 7:36 am

bond equivalent yield

Postby chandniwadhwani92 » Wed Dec 03, 2014 7:38 am

Efective annual yield on an investment is 8%.What is the yield on a bond equivalent basis?/
QUESTION
How to convert annual yield in semi annual????????

3 month loan has a holding period yield of 2%? What is the yield on bond equivalent yield
QUESTION
hOW TO CONVERT 3 MONTH LOAN IN SEMI ANNUAL TO CALCULATE BOND EQUIVALENT YIELD??/

edupristine
Finance Junkie
Posts: 722
Joined: Wed Apr 09, 2014 6:28 am

bond equivalent yield

Postby edupristine » Wed Dec 03, 2014 11:11 am

To convert annual yield in semi annual?
Ans:- Put 1.08^.5= 1.0392,
= 1.0392-1
= .0392*2= .0785
= 7.85%
HOW TO CONVERT 3 MONTH LOAN IN SEMI ANNUAL TO CALCULATE BOND EQUIVALENT YIELD?
Ans:- 1.02^4= 1.0824
1.0824^.5 = 1.0404(Taking effect of BEY)
1.0404 - 1 = .0404 *2 = .0808
8.08%


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