OK. I see. Thank you.This isn't an issue with the spreadsheet YIELD function, or what you see at Schwab. The economic standard for calculating yield does not factor in taxes. How could it, since people's tax rates are different?One problem with the Excel or Google Sheet Yield function is that it does NOT count in the tax for the coupon interest. So the actual money we get will be LESS than the value calculated by Yield or shown in Schwab result.I use the spreadsheet YIELD function to calculate yield to maturity for notes and bonds, which have coupons. The YIELD function also works for bills if you use the correct frequency and day count convention parameters.
Currently in Schwab results of all US Treasuries in secondary market, if sorting by ytm, the maximum one is 91282CCG4 with 5.404%. But that does not count in the tax. If take the tax into consideration, then the results will be different. So this is a bit misleading.
To factor in taxes, you must calculate taxable equivalent yield (TEY) or after tax yield (ATY), for which there are standard formulas: [Wiki] Taxable Equivalent Yield (TEY) - Bogleheads.org
Statistics: Posted by ccw — Thu May 09, 2024 1:15 am