All questions

Why might Jiko display a different yield compared to other sources?

There are different methods of yield calculation that are used in the market. Common methods of calculation used in the market are Discount Yield and Bond Equivalent Yield. Discount Yield is based on 360 days in a year, following the market practice for quoting the yield for T-bills.

There are different methods of yield calculation that are used in the market. Common methods of calculation used in the market are Discount Yield and Bond Equivalent Yield.  

Discount Yield is based on 360 days in a year, following the market practice for quoting the yield for T-bills. The use of 360 for the days in a year is a convention developed before calculators were readily available, but dealers still use this method for quoting T-bill yields.

Bond Equivalent Yield (or Coupon Equivalent Yield) is used to compare the annual yield to bonds that pay periodic interest on an equivalent basis.  

Using the same example above:

Discount Yield = ( (par value - price) / par value ) * ( day count / days to maturity) = (($100 - $99.70) / $100 ) * (360 / 21) = 5.14%
Bond Equivalent Yield = ( (par value - price) / price ) * ( day count / days to maturity) = (($100 - $99.70) / $99.7 ) * (365 / 21) = 5.23%
Jiko’s YTM = ( ( par value  / price ) ^ ( day count / days to maturity ) ) - 1 = ( $100 / $99.70 ) ^ ( 365 / 21 ) - 1 = 5.36%.

The Yield to Maturity from Jiko uses the compound annual growth rate (CAGR) formula and actual day count (365, or 366 for leap years). This is an annualized rate of return, giving a better picture of the return on your investment.

Please note that this example is for illustrative purposes only, and actual results may vary. Unless otherwise stated, Jiko calculates Yield to Maturity before fees. Any fees assessed will reduce realized yield.