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Question:
• The discount basis yield will be lower than the money market yield, as it is based on the face value, not the price. Because the face value of a discounted instrument is greater than its price, the discount basis yield will be lower.
• The bond equivalent yield is greater than the money market yield because it is annualized over a 365‐day year, whereas the money market yield uses a 360‐day year.
• The discount basis yield can be greater than or less than the bond equivalent yield.
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