BDY/MMY/EAY etc

[rexthedog]

I cannot get these to stick in my head.
Does anyone have an easy way of remembering what is what?
Also, I’m struggling to understand how to convert BDY to EAY
.. If the question gives you 90 day to maturity in BDY 3.25%, The effective Annual Yield is?
a) 3.29
b) 3.32
c) 3.36
Thanks

 

[MLSmith107]

We know that…. (FACE - PRICE) /FACE * 360/90 = 0.0325
We sub in 100 or 1000 for FACE and then just rearange to find the PRICE.
Once you have the PRICE you can calc the Holding period yield HPY which is
(FACE - PRICE) / PRICE
then use EAY = (1 + HPY) ^365/90 -1
Should give you C)

 

[S2000magician]

I give a couple of examples here:
http://financialexamhelp123.com/comparing-yield-measures-quant/