It stands for holding period yield; a yield measure that constitutes the holding period return of a fixed-income instrument. For an instrument with a single cash payment during its life, the holding period yield (HPY) is given by:

where: P₀ is the purchase price of the instrument paid at the beginning of holding period, P₁ is the price received at maturity, D₁ is the cash income (interest payment) received at maturity

For pure discount instruments (such as T-bills), interest income is zero (D₁=0). Therefore, the holding period yield is: