yields of a semi-annual-pay and an annual-pay bond cannot be compared directly without [...]
Answer
conversion.
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#reading-7-discounted-cashflows-applications
Question
yields of a semi-annual-pay and an annual-pay bond cannot be compared directly without [...]
Answer
?
Tags
#reading-7-discounted-cashflows-applications
Question
yields of a semi-annual-pay and an annual-pay bond cannot be compared directly without [...]
Answer
conversion.
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Subject 5. Bond Equivalent Yield The convention is to double it and call the result the bond's yield to maturity. This method ignores the effect of compounding semi-annual YTM, and the YTM calculated in this way is called a bond-equivalent yield (BEY).
However, <span>yields of a semi-annual-pay and an annual-pay bond cannot be compared directly without conversion. This conversion can be done in one of the two ways:
Convert the bond-equivalent yield of a semi-annual-pay bond to an annual-pay bond.
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