I was wondering if someone can help me understand how to interpret the "annual yield" that is getting calculated below for NDFs. This is the way it's currently done in the place I work, but not intuitively understanding the formula for it (below).
Any advise would be very appreciated.
For the date to the left, they provide FX spot, Bid and Ask (in outright terms) and arrive to the annual yield (in red), which I don't comprehend conceptually.
Formula used for Annual yield = Annual * (Pips spread / FX spot)