Bond equivalent equivalent, finance, different

prashantsahni

It's different in Corporate finance

HPY x 365/t

So it means that we calculate in differently in exam ? Different calculation in CF section and different in quant section ?

Siddimaula

Bond equivalent yield*

JRossSter

Remeber BEY is only the annualized version of HPY

To understand BEY better...the explaintion inFixed income books is the best...
Most US govt bonds pay semi annual coupon.....say 6.3%...so if you want the BEYwould be the coupon payment compunded 6 monthly will be
=[(1+0.063)^0.5 -1]*2
=6.2%

it is always less than the EAY(6.3%)

ogoluwa

tks varundarji

MythosHF

Yes, calculate differently.

Anyone know why?

homie

- varundarji

I thought that when a bond yield was mentioned, say 6.3% semiannually, that WAS the BEY.....

eagles_dare13

No but you don't need to find the BEY to solve those problems