A money market security with a $1000 face value and 68 days to maturity sells for...
A money market security with a $1000 face value and 68 days to
maturity sells for $961.94. What is its bond equivalent
yield?
Report your answer in % to the nearest 0.01%; e.g., enter 3.95% as
3.95.
Homework Answers
Bond Equivalent Yield (BEY) = ((Par Value – Purchase Price) / Purchase Price) * (365 / Days to Maturity)
= ((1000-961.94)/961.94)*(365/68)
= (38.06/961.94)*(365/68)
= 0.03956587728*5.36764705882
= 0.21237566481
= 21.24%
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