CFA Practice Question

There are 490 practice questions for this study session.

CFA Practice Question

Given a 30-day horizon, a money market yield of 4.0134% produces a(n) ______.
A. holding period yield of 0.3554%
B. holding period yield of 0.4354%
C. effective annual yield of 4.1460%
Explanation: MMY -> HPY: HPY = 0.040134 / (360/30) = 0.33445%
HPY -> EAY: EAY = (1.0033445)365/30 = 4.1460%

User Contributed Comments 3

User Comment
danlan Use 365/30 instead of 12
Xocrevilo Well worth remembering the transition: MMY->HPY->EAY
aha66 A) is technically correct, right?
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