If the overnight fed funds rate is quoted as 0.75 percent, what is the bond equivalent rate? calculate the bond equivalent rate

Question

2 years ago

10

on fed funds if the quoted rate is 1.00 percent.

1 answer:

bezimeni [28] · Answer 1 · 2023-10-11T16:41:39+03:00

Based on the overnight fed fund rate given, the bond equivalent rates can be found to be:

<h3>What are the bond equivalent rates?</h3>

The bond equivalent rate can be found as:

= Fed fund rate x 365 / 360

Solving gives:

= 0.75% x 365/360

= 0.7604%

For a fed fund rate of 1.00%:

= 1.00 x 365/360

= 1.0139%

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