Bank Discount Yield and Money Market Yield

[alpha668]

CFAI curriculum Vol 1, P.310
Anyone knows how to get the formula (6) on this page ?

 

[S2000magician]

I haven’t a copy of the curriculum; if you can reproduce the formula here, I’ll try to help.

 

[Give]

These formulas have become easy for me by remembering them in this way:
Bank Discount Yield: (Dollar Discount / FV) * (360/days to maturity)
Money Market Yield: (Holding Period Yield) * (360/days to maturity)

 

[inCLYNEd.Honoka]

Isn’t the Money market yield: (Bank Discount Yield x 360) / [360 - (t)(bank disount yield)]

 

[alpha668]

S2000magician wrote:
I haven’t a copy of the curriculum; if you can reproduce the formula here, I’ll try to help.

What I meant is how to get the following fomula. I just can not memorize it. As such, I will like to know how to derive it so that I do not need to memorize it. Thank you for your help !
Money market yield = (Bank Discount Yield x 360) / [360 - (t)(bank disount yield)]

 

[S2000magician]

alpha668 wrote:

S2000magician wrote:I haven’t a copy of the curriculum; if you can reproduce the formula here, I’ll try to help.

What I meant is how to get the following fomula. I just can not memorize it. As such, I will like to know how to derive it so that I do not need to memorize it. Thank you for your help !
Money market yield = (Bank Discount Yield x 360) / [360 - (t)(bank disount yield)]

Last chance to walk away.
No? OK, here goes:
HPY = profit / price
HPY = D / (F – D)
MMY = HPY × (360/t) = D / (F – D) × (360/t)
MMY = 360D / [(F – D)t]
MMY= [360D / (F × t)] / [(F – D)t / (F × t)]
MMY = [(D/F) × (360/t)] / [(F – D)/F]
MMY = BDY / [1 – (D/F)]
MMY = (BDY × 360) / {360[1 – (D/F)]}
MMY = (BDY × 360) / [360 – 360 (D/F)]
MMY = (BDY × 360) / [360 – (D/F) × (360/t) × t]
MMY = (BDY × 360) / [360 – (t × BDY)]
Remember, you wanted this.

 

[alpha668]

S2000magician wrote:

alpha668 wrote:

S2000magician wrote:I haven’t a copy of the curriculum; if you can reproduce the formula here, I’ll try to help.

What I meant is how to get the following fomula. I just can not memorize it. As such, I will like to know how to derive it so that I do not need to memorize it. Thank you for your help !
Money market yield = (Bank Discount Yield x 360) / [360 - (t)(bank disount yield)]

Last chance to walk away.
No? OK, here goes:
HPY = profit / price
HPY = D / (F – D)
MMY = HPY × (360/t) = D / (F – D) × (360/t)
MMY = 360D / [(F – D)t]
MMY= [360D / (F × t)] / [(F – D)t / (F × t)]
MMY = [(D/F) × (360/t)] / [(F – D)/F]
MMY = BDY / [1 – (D/F)]
MMY = (BDY × 360) / {360[1 – (D/F)]}
MMY = (BDY × 360) / [360 – 360 (D/F)]
MMY = (BDY × 360) / [360 – (D/F) × (360/t) × t]
MMY = (BDY × 360) / [360 – (t × BDY)]
Remember, you wanted this.

As always, thank you so much !

 

[S2000magician]

alpha668 wrote:

S2000magician wrote:

alpha668 wrote:

S2000magician wrote:I haven’t a copy of the curriculum; if you can reproduce the formula here, I’ll try to help.

What I meant is how to get the following fomula. I just can not memorize it. As such, I will like to know how to derive it so that I do not need to memorize it. Thank you for your help !
Money market yield = (Bank Discount Yield x 360) / [360 - (t)(bank disount yield)]

Last chance to walk away.
No? OK, here goes:
HPY = profit / price
HPY = D / (F – D)
MMY = HPY × (360/t) = D / (F – D) × (360/t)
MMY = 360D / [(F – D)t]
MMY= [360D / (F × t)] / [(F – D)t / (F × t)]
MMY = [(D/F) × (360/t)] / [(F – D)/F]
MMY = BDY / [1 – (D/F)]
MMY = (BDY × 360) / {360[1 – (D/F)]}
MMY = (BDY × 360) / [360 – 360 (D/F)]
MMY = (BDY × 360) / [360 – (D/F) × (360/t) × t]
MMY = (BDY × 360) / [360 – (t × BDY)]
Remember, you wanted this.

As always, thank you so much!

My pleasure.

 

[mokpokpo]

S2000magician appears to know everything.You really helping.thanks

 

[S2000magician]

mokpokpo wrote:S2000magician appears to know everything.

Not by a long shot. But I do know one or two things.

mokpokpo wrote:You really helping

Good to know.

mokpokpo wrote:thanks

You’re quite welcome.

 

[exotichedge]

S2000magician wrote:
Not by a long shot. But I do know one or two things.

Liar „„ you know everything, atleast you have some kind of magic that everyone believes you know everything

 

[mokpokpo]

yeah!!!! can’t agree more