[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
← Mathematical Theatre of Beautiful Lies | Basic Earnings Per Share (EPS) →