Take the 2-minute tour ×
Quantitative Finance Stack Exchange is a question and answer site for finance professionals and academics. It's 100% free, no registration required.

When quoting a yield of a transaction e.g. yield 3.8% behind the yield it is quote "factor" - in this case of a yield of 3.8% it is mentioned in brackets (factor 26.11) . The lower the yield the higher the factor. How does one calculate the factor and what does it mean? In a calculation regarding a property sale and although the calculation is understood I still don't understand what "factor" means, I don't mean the word but the meaning in this context what relation has this to the yield or why the calculation of the factor?

share|improve this question
    
Where did you see this? $\frac{100}{3.8} = 26.32$ –  chrisaycock Sep 25 '13 at 18:40
    
I could think of the annual rent: you get 3.8% of your purchase price annually. Factors are often used in property sales to state how many years of annual rent you pay for the object –  chriscross Sep 25 '13 at 21:54
add comment

Your Answer

 
discard

By posting your answer, you agree to the privacy policy and terms of service.

Browse other questions tagged or ask your own question.