[Verse 1]
When you buy a Treasury bill or short-term note
The yield that's quoted might make you take note
There's different ways to calculate what you'll earn
Money market basis is the first to learn
[Chorus]
Three sixty basis, that's the money way
Three sixty five for bond equivalent today
Convert between them with a simple trick
Multiply or divide to make the numbers click
Money market low, bond equivalent high
Same investment, different ways to quantify
[Verse 2]
Money market yield uses three sixty days
Actual dollars earned, that's how it pays
Take your discount, divide by face amount
Then by days to maturity, that's the count
[Chorus]
Three sixty basis, that's the money way
Three sixty five for bond equivalent today
Convert between them with a simple trick
Multiply or divide to make the numbers click
Money market low, bond equivalent high
Same investment, different ways to quantify
[Verse 3]
Bond equivalent yield wants three sixty five
More days in the year keeps the rate alive
It also compounds, assumes you reinvest
Higher than money market, that's the test
[Bridge]
From money market to BEY we go
Multiply by three sixty five over three sixty, now you know
The other direction, flip the fraction around
Three sixty over three sixty five brings it down
[Chorus]
Three sixty basis, that's the money way
Three sixty five for bond equivalent today
Convert between them with a simple trick
Multiply or divide to make the numbers click
Money market low, bond equivalent high
Same investment, different ways to quantify
[Outro]
Short-term instruments, two ways to see
Choose your convention, money market or BEY
Remember the numbers, three sixty and five
Keep your yield calculations accurate and alive