Page 65 - FINAL CFA SLIDES DECEMBER 2018 DAY 11

Session Unit 11:

38. Working Capital Management (A/B/C/A/B/B)

tanties

The actual discount on the acceptance is (26,500 – 25,400) / 26,500 = 4.151%. The
annualized discount, or discount-basis yield, is 4.151(360/80) = 18.68%.
The holding period yield is (26,500 – 25,400) / 25,400 = 4.331%. The bond
equivalent yield is 4.331(365/80) = 19.76%.