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Basic Question 3 of 10
Which statement regarding the comparison between the true yield and the street convention yield is CORRECT?
B. The street convention yield can never be higher than the true yield.
C. The true yield and street convention yield can never be equal.
A. The true yield can never be higher than the street convention yield.
B. The street convention yield can never be higher than the true yield.
C. The true yield and street convention yield can never be equal.
User Contributed Comments 2
| User | Comment |
|---|---|
| chester21 | Because of the effect of accrued interest |
| fabsan | you wrong chester21. The True yield include all days (weekend and holiday) in a single year. But, the street conv yield only take business days. If I say, I made 2% on 365 days (true yield) and you said you made 2% on 255 days (because you only take into account the business days); if we were to compare our 2 performances, you will always make more. |
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Learning Outcome Statements
compare, calculate, and interpret yield and yield spread measures for fixed-rate bonds
CFA® 2025 Level I Curriculum, Volume 4, Module 7.