**UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549**

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**FORM 10-Q**

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(MARK ONE)

**[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
             SECURITIES EXCHANGE ACT OF 1934**

**For the quarterly period ended **December 31, 2003** or**

**[  ]       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934**

**FOR THE TRANSITION PERIOD FROM ___________ TO  _____________**

**Commission file number 000-19690**

**BARRA, INC.**
(Exact name of registrant as specified in its charter)



|**Delaware**                                                   | **94-2993326**                         
|-------------------------------------------------------------- | ---------------------------------------
|(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number)

**2100 Milvia StreetBerkeley, California     94704-1113**(Address, including zip code, of principal executive offices)

**(510) 548-5442**(Registrant's telephone number, including area code)







Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file reports), and (2) has been subject to such filing
requirements for the past 90 days.    YES [X] NO [   ]

Indicate by check mark whether the registrant is an accelerated filer (as defined
by Rule 12b-2 of the Exchange Act) YES [X] NO [   ]

The number of shares of the registrant's Common Stock outstanding as of
February 5, 2004 was 18,846,047.

     Exhibit Index is located on page 42







**BARRA, INC.
                           Report On Form 10-Q For The
                           Quarter Ended December 31, 2003
                                     INDEX**



|**PART I.   Financial Information**                                                                                                              | **Page No.**
|------------------------------------------------------------------------------------------------------------------------------------------------ | ------------
|                                                                                                                                                 |             
|Item 1.   Financial Statements:                                                                                                                  |             
|                                                                                                                                                 |             
|Condensed Consolidated Balance Sheets as of December 31, 2003
          
          (Unaudited) and as of March 31, 2003                          | 3           
|                                                                                                                                                 |             
|Unaudited Condensed Consolidated Statements of Income for the Three Months
          
          and Nine Months Ended December 31, 2003 and 2002 | 4           
|                                                                                                                                                 |             
|Unaudited Condensed Consolidated Statements of Cash Flows for the Nine
          
          Months Ended December 31, 2003 and 2002              | 5           
|                                                                                                                                                 |             
|Notes to Condensed Consolidated Financial Statements                                                                                             | 6           
|                                                                                                                                                 |             
|Item 2.   Management's Discussion and Analysis of Financial
                      Condition and Results of Operations                            | 14          
|                                                                                                                                                 |             
|Item 3.   Quantitative and Qualitative Disclosures About Market Risk                                                                             | 36          
|                                                                                                                                                 |             
|Item 4.   Controls and Procedures                                                                                                                | 37          
|                                                                                                                                                 |             
|**PART II.  Other Information**                                                                                                                  |             
|                                                                                                                                                 |             
|Item 1.   Legal Proceedings                                                                                                                      | 39          
|                                                                                                                                                 |             
|Item 5.   Other Information                                                                                                                      | 39          
|                                                                                                                                                 |             
|Item 6.   Exhibits and Reports on Form 8-K                                                                                                       | 39          
|                                                                                                                                                 |             
|**Signatures**                                                                                                                                   | 41          
|**Exhibit Index**                                                                                                                                | 42          

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**PART I -- FINANCIAL INFORMATION

Item 1. Financial Statements**

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**BARRA, INC. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS**
(In thousands except for share and per share amounts)

`December 31,     March 31,
                                                        2003           2003
                                                    -------------  -------------
                                                     (Unaudited)
                            ASSETS
Current Assets:
  Cash and cash equivalents........................      $36,555        $26,848
  Investments in marketable equity trading
    securities.....................................       15,735         15,025
  Investments in marketable debt securities
    available-for-sale.............................      152,300        158,238
  Accounts receivable (Less allowance for doubtful
  accounts of $729 and $916):
    Risk management products.......................        7,523          9,379
    POSIT royalties................................        4,125          2,975
  Prepaid expenses.................................        2,348          2,165
                                                    -------------  -------------
    Total current assets...........................      218,586        214,630
                                                    -------------  -------------
Investments in Unconsolidated Companies............        3,250          3,358
Premises and Equipment:
  Computer and office equipment....................       15,843         14,482
  Furniture and fixtures...........................        4,767          4,948
  Leasehold improvements...........................        7,925          7,710
                                                    -------------  -------------
    Total premises and equipment...................       28,535         27,140
Less accumulated depreciation and amortization.....      (21,594)       (18,510)
                                                    -------------  -------------
                                                           6,941          8,630
Deferred Tax Assets................................        5,398          5,509
Computer Software (Less accumulated amortization
  of $4,098 and $3,481)............................        1,031          1,156
Other Assets.......................................        1,483          1,391
Goodwill and Other Intangibles (Less accumulated
  amortization of $6,875 and $5,825)...............       33,808         34,858
                                                    -------------  -------------
TOTAL ASSETS.......................................     $270,497       $269,532
                                                    =============  =============

            LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Accounts payable.................................       $1,792           $929
  Due to related party.............................          600          1,106
  Accrued expenses payable:
    Accrued compensation...........................        6,713          8,334
    Accrued income taxes...........................       11,466          8,630
    Other accrued expenses.........................        7,018          7,808
  Unearned revenues................................       33,678         32,253
                                                    -------------  -------------
    Total current liabilities......................       61,267         59,060
                                                    -------------  -------------
Deferred Tax Liabilities...........................        6,955          6,951

Stockholders' Equity:
  Preferred stock, no par, 10,000,000 shares
   authorized, none issued and outstanding;........         --             --
  Common stock, $.0001 par value, 75,000,000
   shares authorized, 19,042,447 and 19,145,965
   shares issued and outstanding...................            2              2
  Additional paid-in capital.......................       91,658         83,528
  Retained earnings................................      110,655        119,440
  Accumulated other comprehensive income (loss)....          (40)           551
                                                    -------------  -------------
    Total stockholders' equity.....................      202,275        203,521
                                                    -------------  -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.........     $270,497       $269,532
                                                    =============  =============`

The accompanying notes are an integral part of the BARRA, Inc. Condensed Consolidated
                       Financial Statements.

---

**BARRA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME**
(In thousands except for share and per share amounts)

`Three Months Ended        Nine Months Ended
                                                  December 31,              December 31,
                                           ------------------------- -------------------------
                                               2003         2002         2003         2002
                                           ------------ ------------ ------------ ------------
                                           (Unaudited)  (Unaudited)  (Unaudited)  (Unaudited)
Operating Revenues:
  Risk management products.....                $34,249      $31,159     $100,480      $90,846
  POSIT royalties..............                  3,934        4,027       13,460       14,023
                                           ------------ ------------ ------------ ------------
    Total operating revenues...                 38,183       35,186      113,940      104,869
                                           ------------ ------------ ------------ ------------
Operating Expenses:
  Communications, data and
    seminar ...................                  1,872        1,692        6,139        5,679
  Compensation and benefits....                 18,211       16,824       53,847       48,505
  Occupancy....................                  1,852        1,533        5,666        4,538
  Amortization of acquired.....
    intangibles................                    350            --       1,050            --
  Other operating expenses.....                  4,623        4,364       12,642       12,879
  Restructuring charges........                      --           --       2,466            --
                                           ------------ ------------ ------------ ------------
    Total operating expenses...                 26,908       24,413       81,810       71,601
                                           ------------ ------------ ------------ ------------
Interest Income and Other......                  1,417        1,120        3,345        6,471
                                           ------------ ------------ ------------ ------------
Income Before Equity in Income
  and Loss of Unconsolidated
  Companies, Income Taxes
  and Discontinued Operations..                 12,692       11,893       35,475       39,739

Equity in Income and Loss of
  Unconsolidated Companies.....                     32          132           24          166
                                           ------------ ------------ ------------ ------------
Income Before Income Taxes
  and Discontinued Operations..                 12,724       12,025       35,499       39,905

Income Taxes...................                 (4,072)      (3,400)     (11,359)     (12,587)
                                           ------------ ------------ ------------ ------------
Income from Continuing
  Operations...................                  8,652        8,625       24,140       27,318
                                           ------------ ------------ ------------ ------------
Discontinued Operations:
  Gain on sale, net of income
    taxes......................                  2,506            --       4,608            --
                                           ------------ ------------ ------------ ------------
Net Income                                     $11,158       $8,625      $28,748      $27,318
                                           ============ ============ ============ ============

Income Per Share:

Continuing operations:
  Basic........................                  $0.45        $0.44        $1.25        $1.34
                                           ============ ============ ============ ============
  Diluted......................                  $0.43        $0.42        $1.21        $1.29
                                           ============ ============ ============ ============

Discontinued operations -  gain
  on sale, net of income taxes:
  Basic........................                  $0.13        $0.00        $0.24        $0.00
                                           ============ ============ ============ ============
  Diluted......................                  $0.13        $0.00        $0.23        $0.00
                                           ============ ============ ============ ============

Net income:
  Basic........................                  $0.58        $0.44        $1.49        $1.34
                                           ============ ============ ============ ============
  Diluted......................                  $0.56        $0.42        $1.44        $1.29
                                           ============ ============ ============ ============

Shares used in net income per
  share calculation:
  Basic........................             19,387,907   19,781,236   19,293,528   20,415,865
                                           ============ ============ ============ ============
  Diluted......................             20,027,252   20,351,757   19,977,735   21,115,476
                                           ============ ============ ============ ============`

The accompanying notes are an integral part of the BARRA, Inc. Condensed Consolidated
                             Financial Statements.

---

**BARRA, INC. AND SUBSIDIARIES

                   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**
(In thousands)

`Nine Months Ended
                                                           December 31,
                                                   ----------------------------
                                                       2003           2002
                                                   -------------  -------------
                                                    (Unaudited)    (Unaudited)
Cash Flows from Operating Activities:
Net Income .......................................      $28,748        $27,318
Adjustments to reconcile net income to net
cash provided by operating activities:
     Equity in income of investees................          (24)          (166)
     Depreciation and amortization................        4,794          3,777
     Unrealized gains on marketable equity
      securities held for trading.................         (772)          (278)
     Sale of marketable equity trading securities.           62              --
     Deferred taxes...............................          115          1,345
     Gain on sale of discontinued operations......       (7,433)             --
     Other........................................        1,370          1,080
Changes in:
     Accounts receivable - Risk management
      products....................................        1,856         (1,459)
     Accounts receivable - POSIT royalties........       (1,150)         1,560
     Prepaid expenses.............................         (183)          (975)
     Other assets.................................          (92)          (325)
     Accrued income taxes.........................        2,836          3,165
     Accounts payable, due to related party
      and accrued expenses........................       (2,054)        (4,386)
     Unearned revenues............................        1,425            354
                                                   -------------  -------------
Net cash provided by operating activities.........       29,498         31,010
                                                   -------------  -------------

Cash Flows from Investing Activities:
Capital expenditures..............................       (1,932)        (1,847)
Sale of marketable debt securities - available
 for sale, net....................................        5,938         31,265
Acquisitions......................................            --       (22,341)
Proceeds from sale of discontinued operations.....        7,433              --
                                                   -------------  -------------
Net cash provided by investing activities                11,439          7,077
                                                   -------------  -------------
Cash Flows from Financing Activities:
Proceeds from sales of common stock...............        7,033          4,254
Dividends paid to common shareholders.............      (19,494)             --
Common stock repurchased..........................      (18,769)       (82,853)
                                                   -------------  -------------
Net cash used in financing activities                   (31,230)       (78,599)
                                                   -------------  -------------
Net Increase (Decrease) in Cash and Cash
  Equivalents                                             9,707        (40,512)
Cash and Cash Equivalents at Beginning of Period...      26,848         58,499
                                                   -------------  -------------
Cash and Cash Equivalents at End of Period.........     $36,555        $17,987
                                                   =============  =============

Other Cash Flow Information:
Cash paid during the period for:
     Income taxes.................................       $9,661         $4,977`

The accompanying notes are an integral part of the BARRA, Inc. Condensed Consolidated
                       Financial Statements.

---

**BARRA, INC. AND SUBSIDIARIES

             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**1.   BASIS OF PRESENTATION**

The accompanying condensed consolidated financial statements include the accounts of Barra, Inc. (the
Company, which may be referred to as Barra, we, us or our) and its wholly-owned subsidiaries.  All significant intercompany
transactions and balances have been eliminated.  Certain reclassifications have been made to prior period financial statements to
conform to the current period presentation.

In our opinion, the accompanying unaudited condensed consolidated financial statements include all adjustments
(consisting of normal recurring entries) necessary to present fairly our financial position as of December 31, 2003 and the results
of our operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United
States of America.  The results of operations for the interim periods are not necessarily indicative of results of operations for a
full year. The March 31, 2003 condensed consolidated balance sheet is derived from the audited consolidated financial
statements included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2003 (Form 10-K), but does
not include all disclosures required by accounting principles generally accepted in the United States of America. We suggest that
these condensed consolidated financial statements be read in conjunction with the audited consolidated financial statements and
related notes included in the Form 10-K and Management's Discussion and Analysis of Financial Condition and Results of
Operations included in this Form 10-Q.

**2.      COMPREHENSIVE INCOME**

Comprehensive income includes unrealized gains and losses on investments in marketable
debt securities available for sale. A summary of comprehensive income follows (in thousands):

`Three Months Ended December 31,
                                           -------------------------
                                               2003         2002
                                           ------------ ------------
Net income ..................                  $11,158       $8,625
Unrealized gain (loss) on
  investments in marketable
  debt securities available
  for sale...................                     (225)         365
                                           ------------ ------------
Comprehensive income ........                  $10,933       $8,990
                                           ============ ============

                                          Nine Months Ended December 31,
                                           -------------------------
                                               2003         2002
                                           ------------ ------------
Net income ..................                  $28,748      $27,318
Unrealized gain (loss) on
  investments in marketable
  debt securities available
  for sale...................                     (592)         883
                                           ------------ ------------
Comprehensive income ........                  $28,156      $28,201
                                           ============ ============`

**3.     SEGMENT INFORMATION**

Operating segments are defined as components of an enterprise about which separate financial information is
available that is evaluated regularly by the chief operating decision maker when deciding how to allocate resources and when
assessing performance. Our chief operating decision making group is the Executive Committee, which is comprised of the Chief
Executive Officer and certain other Executive Officers (the Committee).

Barra's business segments are organized on the basis of differences in their related products and services. The
Core Business segment consists of developing, marketing and supporting risk management products and services.  The Barra Ventures
Business segment consists of investments, joint ventures or significant licensing arrangements that leverage the ideas and
intellectual property of the Core Business. The POSIT joint venture is our most significant Ventures Business.  POSIT licenses
institutional trading systems that allow institutional investors to trade portfolios of securities directly with each other in a
confidential environment.

Segment income from operations is defined as segment revenues net of segment expenses, and equity in joint venture
gains and losses for the current year. Segment expenses include costs for sales and client support activities, the cost of delivering
the product or service including data and data processing costs, and allocated amounts of depreciation and amortization. Segment
expenses also include allocated portions of research and development and general and administrative expenses for the current year.

For all years presented, segment expenses exclude income taxes and interest income.

There are no differences between the accounting policies used to measure profit and loss for segments and those
used on a consolidated basis. Revenues are defined as revenues from external customers and there are no inter-segment revenues or
expenses.

Our management does not identify or allocate its assets, including capital expenditures, by operating segment.
Accordingly, assets are not being reported by segment because the information is not available by segment and is not reviewed by the
Committee to make decisions about resources to be allocated to the segments, when assessing their performance. Depreciation and
amortization is allocated to segments in order to determine segment profit or loss.



The following tables present information about reported segments for the three and nine month periods ended
December 31, 2003 and 2002 (amounts in thousands):

****

For the three months ended December 31, 2003:

`------------- -----------------------------------------
                             BARRA CORE                  BARRA VENTURES
                            ------------- ----------------------------------------- -------------
                                              POSIT                      Total
                                Core      Joint Venture     Other       Ventures        Total
                            ------------- ------------- ------------- ------------- -------------
Risk Management Products....     $34,249                                                 $34,249
POSIT.......................                    $3,934                       3,934         3,934
                            ------------- ------------- ------------- ------------- -------------
  Total segment revenues          34,249         3,934         --            3,934        38,183

Compensation and Benefits...     (17,759)         (452)                       (452)      (18,211)
Other Segment expenses......      (8,212)         (135)                       (135)       (8,347)
Amortization of acquired
  intangibles...............        (350)                                                   (350)
Equity in net income of
  investees.................                        32         --               32            32
                            ------------- ------------- ------------- ------------- -------------
  Total segment expenses         (26,321)         (555)        --             (555)      (26,876)
                            ------------- ------------- ------------- ------------- -------------
Segment income                    $7,928        $3,379         --           $3,379       $11,307
                            ============= ============= ============= ============= =============
Interest income and other...                                                               1,417
                                                                                    -------------
Income before income taxes
  and discontinued
  operations................                                                             $12,724
                                                                                    =============
Depreciation and
  amortization                    $1,596           $13         --              $13        $1,609`

For the three months ended December 31, 2002:

`------------- -----------------------------------------
                             BARRA CORE                  BARRA VENTURES
                            ------------- ----------------------------------------- -------------
                                              POSIT                      Total
                                Core      Joint Venture     Other       Ventures        Total
                            ------------- ------------- ------------- ------------- -------------
Risk Management Products....     $31,159                                                 $31,159
POSIT.......................                    $4,027                       4,027         4,027
                            ------------- ------------- ------------- ------------- -------------
  Total segment revenues          31,159         4,027         --            4,027        35,186

Compensation and Benefits...     (16,233)         (591)                       (591)      (16,824)
Other Segment expenses......      (7,356)         (233)                       (233)       (7,589)
Equity in net income of
  investees.................                       132         --              132           132
                            ------------- ------------- ------------- ------------- -------------
  Total segment expenses         (23,589)         (692)        --             (692)      (24,281)
                            ------------- ------------- ------------- ------------- -------------
Segment income                    $7,570        $3,335         --           $3,335       $10,905
                            ============= ============= ============= ============= =============
Interest income and other...                                                               1,120
                                                                                    -------------
Income before income taxes
  and discontinued
  operations................                                                             $12,025
                                                                                    =============
Depreciation and
  amortization                    $1,202           $22         --              $22        $1,224`

For the nine months ended December 31, 2003:

`------------- -----------------------------------------
                             BARRA CORE                  BARRA VENTURES
                            ------------- ----------------------------------------- -------------
                                              POSIT                      Total
                                Core      Joint Venture     Other       Ventures        Total
                            ------------- ------------- ------------- ------------- -------------
Risk Management Products....    $100,480                                                $100,480
POSIT.......................                   $13,460                      13,460        13,460
                            ------------- ------------- ------------- ------------- -------------
  Total segment revenues         100,480        13,460         --           13,460       113,940

Compensation and Benefits...     (52,386)       (1,461)                     (1,461)      (53,847)
Other Segment expenses......     (24,017)         (430)                       (430)      (24,447)
Amortization of acquired
  intangibles...............      (1,050)                                                 (1,050)
Restructuring charges.......      (2,466)                                                 (2,466)
Equity in net income (loss)
  of investees..............                       129          (105)           24            24
                            ------------- ------------- ------------- ------------- -------------
  Total segment expenses         (79,919)       (1,762)         (105)       (1,867)      (81,786)
                            ------------- ------------- ------------- ------------- -------------
Segment income (loss)            $20,561       $11,698         ($105)      $11,593       $32,154
                            ============= ============= ============= ============= =============
Interest income and other...                                                               3,345
                                                                                    -------------
Income before income taxes
  and discontinued
  operations................                                                             $35,499
                                                                                    =============
Depreciation and
  amortization                    $4,748           $46         --              $46        $4,794`

For the nine months ended December 31, 2002:

`------------- -----------------------------------------
                             BARRA CORE                  BARRA VENTURES
                            ------------- ----------------------------------------- -------------
                                              POSIT                      Total
                                Core      Joint Venture     Other       Ventures        Total
                            ------------- ------------- ------------- ------------- -------------
Risk Management Products....     $90,846                                                 $90,846
POSIT.......................                   $14,023                      14,023        14,023
                            ------------- ------------- ------------- ------------- -------------
  Total segment revenues          90,846        14,023         --           14,023       104,869

Compensation and Benefits...     (47,024)       (1,481)                     (1,481)      (48,505)
Other Segment expenses......     (22,395)         (701)                       (701)      (23,096)
Equity in net income (loss)
  of investees..............                       199           (33)          166           166
                            ------------- ------------- ------------- ------------- -------------
  Total segment expenses         (69,419)       (1,983)          (33)       (2,016)      (71,435)
                            ------------- ------------- ------------- ------------- -------------
Segment income (loss)            $21,427       $12,040          ($33)      $12,007       $33,434
                            ============= ============= ============= ============= =============
Interest income and other...                                                               6,471
                                                                                    -------------
Income before income taxes
  and discontinued
  operations................                                                             $39,905
                                                                                    =============
Depreciation and
  amortization                    $3,709           $68         --              $68        $3,777`

**4.     PER SHARE DATA**

In accordance with Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings
Per Share", basic earnings per share is based on the weighted-average number of common shares outstanding for the period.
Diluted earnings per share data is based on the weighted-average number of common and dilutive potential common shares outstanding.
Dilutive potential common shares result from the assumed exercise of outstanding stock options that have a dilutive effect when
applying the treasury stock method. For all periods presented, the only difference between basic and diluted earnings per share for
the Company is the inclusion of dilutive stock options in the denominator for purposes of calculating diluted earnings per share.

**5.      NEW ACCOUNTING STANDARDS**

In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with Exit or Disposal
Activities, which addresses accounting for restructuring and similar costs.  SFAS No. 146 supersedes previous accounting guidance,
principally Emerging Issues Task Force Issue No. 94-3.  The Company adopted the provisions of SFAS No. 146 for restructuring
activities initiated after December 31, 2002.  SFAS No. 146 requires that the liability for costs associated with an exit or disposal
activity be recognized when the liability is incurred.  Under Issue No. 94-3, a liability for an exit cost was recognized at the date
of the Company's commitment to an exit plan.  SFAS No. 146 also establishes that the liability should initially be measured and
recorded at fair value.  Accordingly, SFAS No. 146 may affect the timing of recognizing future restructuring costs as well as the
amounts recognized.

In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based Compensation- Transition and
Disclosure- an amendment to FASB No. 123.  This Statement amends SFAS No. 123, Accounting for Stock-Based Compensation, to provide
alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee
compensation. In addition, this Statement amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in both
annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the
method used on reported results. This Statement is effective for fiscal years ending after December 15, 2002.  The disclosures
required by SFAS No. 148 are included in our Condensed Consolidated Financial Statements or the accompanying Notes to our Condensed
Consolidated Financial Statements. The Company is currently evaluating the various transition methods set forth in SFAS No. 148.

In January 2003, FASB issued Interpretation No. 46 (FIN 46), "Consolidation of Variable Interest
Entities."  In December 2003 the FASB issued FIN 46 (R), which made certain modifications to FIN 46 and required the
consolidation of certain Special Purpose Entities (SPE). FIN 46 explains how to identify and assess variable interest entities and
how to decide whether to consolidate such entities.  FIN 46 requires existing unconsolidated variable interest entities to be
consolidated by their primary beneficiaries if the entities do not effectively disperse risks equally among the parties involved.
Barra adopted FIN 46 (R) on December 31, 2003 and consolidated the POSIT joint venture.   Adoption of FIN 46 (R) did not have a
material impact on the on the financial position, results of operations or cash flows of the Company.





**6.    ACQUISITIONS**

Barra acquired Financial Engineering Associates, Inc. (FEA), a developer of derivatives and risk analytics
software for traders, risk managers, and financial analysts for a wide range of industries, on December 12, 2002 for $22.9 million in
cash, plus approximately $5.8 million in assumed liabilities.  Also, on December 23, 2002, we acquired Investment Performance
Objects, Ltd. (IPO), an Australian company specializing in performance attribution products, for $3 million in cash, of which $2.4
million was paid on the acquisition date with the remaining amount recorded as due to a related party on the balance sheet.  The
acquisition price of FEA and IPO exceeded the tangible and identifiable intangible fair values of assets and liabilities resulting in
goodwill of $20.0 million and $2.9 million, respectively. Approximately $3 million of the aggregate amount allocated to intangibles
recorded as a result of these transactions is expected to be deductible for income tax purposes.

Operating results of FEA and IPO are included in our financial statements from the date of the acquisition.  Pro
forma statements of income have not been presented because the effect of the acquisitions were not material.

**7.  STOCK-BASED COMPENSATION**

Stock-Based Awards to employees are accounted for using the intrinsic value method in accordance with
Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, which is permitted by SFAS No. 123- Accounting
for Stock-Based Compensation (SFAS No. 123).  In December 2002, FASB issued SFAS No. 148- Accounting for Stock-Based Compensation-
Transition and Disclosure - an amendment to FASB 123.  This statement provides alternative methods of transition for a voluntary
change to the fair value based method of accounting for stock-based employee compensation.  This statement also amends the disclosure
requirements of SFAS No. 123 to require prominent disclosures in financial statements about the method of accounting for stock-based
employee compensation and the effect of the method used on reported results.

Under SFAS 123, the fair value of stock based awards to employees is calculated through the use of option pricing
models, even though such models were developed to estimate the fair value of freely tradable, fully transferable options without
vesting restrictions, which significantly differ from our stock option awards.  These models also require subjective assumptions,
including future stock volatility and expected time to exercise, which greatly affect the calculated values. Our calculations were
made using the Black-Scholes option pricing model with the following weighted average assumptions: weighted average expected life, 72
months for all periods presented; stock volatility, 27% and 50% for the December 2003 and 2002 quarters, respectively, and 29% and
50% for the nine month periods ended December 31, 2003 and 2002, respectively; risk free interest rates, 3.8% and 3.9% for the
December 2003 and 2002 quarters, respectively, and 3.5% and 3.9% for nine month periods ended December 31, 2003 and 2002,
respectively; and a dividend rate of 1.5% and 0% for the December 2003 and 2002 quarters, respectively and 0.4% and 0% for the nine
month periods ended December 31, 2003 and 2002, respectively.  Had the computed fair values of the stock-based awards under our Stock
Option Plans been amortized to expense over the vesting periods of the awards, pro forma amounts would have been as follows (in
thousands, except for per share amounts):

`Three Months Ended
                                   December 31,
                               -------------------
                                 2003      2002
                               --------- ---------
Net income, as reported........ $11,158    $8,625
Deduct stock-based compensation
  Expense (net of income tax)    (2,345)   (2,341)
                               --------- ---------

Pro Forma net income              8,813     6,284
                               ========= =========

Per Share:

Basic, as reported                $0.58     $0.44
Basic, pro forma                  $0.45     $0.32

Diluted, as reported              $0.56     $0.42
Diluted, pro forma                $0.44     $0.31



                                  Nine Months Ende
                                   December 31,
                               -------------------
                                 2003      2002
                               --------- ---------
Net income, as reported........ $28,748   $27,318
Deduct stock-based compensation
  Expense (net of income tax)    (7,363)   (7,111)
                               --------- ---------

Pro Forma net income             21,385    20,207
                               ========= =========

Per Share:

Basic, as reported                $1.49     $1.34
Basic, pro forma                  $1.11     $0.99

Diluted, as reported              $1.44     $1.29
Diluted, pro forma                $1.07     $0.96`

**8. DISCONTINUED OPERATIONS**



Gain on sale of discontinued operations for the quarter ended December 31, 2003 of $2.5
million, net of income taxes, represents a contingent payment received from the sale of our interest in Symphony Asset Management LLC
(Symphony).  The terms of the sale of our interest in Symphony to the John Nuveen Company included up to approximately $12 million in
additional future payments, contingent on Symphony's business exceeding specific growth and profitability targets.  Contingent
payments are recorded only as received in accordance with generally accepted accounting principles.  The December 2003 quarter marks
the end of our potential to receive quarterly contingent payments.  Since the sale of Symphony in July 2001 we have received gross
contingent payments of approximately $9.7 million.  We have the potential to receive up to an additional approximately $2.3 million
in contingent consideration based on Symphony's annual financial performance over the five years following the sale. The next
measurement date for additional contingent payments will at the end of September 2006.





**9. RESTRUCTURING**

In April 2003 we implemented a restructuring program that resulted in a workforce reduction of
approximately 9%.  We recorded and paid restructuring costs related to severance and benefits of $2,466,000 in the quarter ended June
30, 2003.



**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.**

The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated
financial statements and the related notes (included elsewhere in this report), as well as with our Annual Report on Form 10-K
for the fiscal year ended March 31, 2003. This discussion and analysis and other parts of this Form 10-Q contain forward looking
statements that involve risks and uncertainties, as well as assumptions made by us regarding our expectations and other future
events.  We make those forward-looking statements in reliance on the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995.  For further information regarding how to identify forward looking statements and the factors that could cause
actual results to differ, please refer to the information under the heading "RISK FACTORS" below.  Any or all of the
forward-looking statements that we make in this Form 10-Q or any other public statements we issue may turn out to be wrong.  It is
also important to remember that other factors besides those we mention could also adversely affect us and our business, operating
results or financial condition.

**Critical Accounting Policies and Estimates**

General

Management's Discussion and Analysis of Financial Condition and Results of Operations are based upon our
consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United
States of America.  The preparation of these financial statements requires management to make estimates and assumptions that affect
the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.
Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources.  Actual results may differ from these estimates under different assumptions or
conditions.

Management believes the following critical accounting policies affect its more significant estimates and
assumptions used in the preparation of its consolidated financial statements.

Revenue Recognition

Risk management products  - Subscription fees are initially deferred as unearned revenues when payment has
been received and revenue is recognized ratably over the subscription term.  Implementation fees are recorded as earned, generally on
a time and materials basis.  Perpetual license fees on derivative market risk assessment products are recorded as revenue upon
shipment of the product. Maintenance fees are initially deferred as unearned revenues and ratably recognized over the maintenance
term.  The timing and certain methods of recognizing revenues require management to make estimates with respect to costs incurred,
milestones reached and other factors.



POSIT - POSIT revenues, which consist primarily of license royalties based on the trading volume of U.S.
equities from the Portfolio System for Institutional Trading (POSIT) joint venture, are recognized as trades are executed on
POSIT.



Allowance for Doubtful Accounts

We evaluate the collectability of our trade receivables on a combination of factors.  When we become aware of
a specific customer's inability to meet its financial obligation to us, such as in the case of bankruptcy filings or deterioration in
the customer's financial position, we record a specific reserve for bad debt to reduce the related receivable to the amount we
reasonably believe is collectible.  We also record reserves for bad debt for all other customers based on a variety of factors,
including the length of time the receivables are past due and historical experience.  If circumstances related to specific customers
change, our estimates of the recoverability of receivables could be further adjusted.



Investments in Unconsolidated Companies

We monitor our investments in unconsolidated companies for impairment on a periodic basis.  In the event that
the carrying value of an investment exceeds its fair value and the decline in value is determined to be other than temporary, an
impairment charge is recorded and a new cost basis for the investment is established.  Fair values for investments in privately held
companies are estimated based on one or more of the following:  pricing models using historical and forecasted financial information,
liquidation values, the values of recent rounds of financing or quoted market prices of comparable public companies.  In order to
determine whether a decline in value is other than temporary, we evaluate, among other factors:  the duration and extent to which the
fair value has been less than the carrying value; the financial condition of and business outlook for the company, including key
operational and cash flow metrics, current market conditions and future trends in the company's industry, and the company's relative
competitive position within the industry; and our intent and ability to retain the investment for a period of time sufficient to
allow for any anticipated recovery in fair value.



Incentive Compensation

Annual incentive bonuses are a significant part of Barra's compensation philosophy.  These cash bonuses are
generally tied to achieving certain firm-wide financial metrics and department level objectives.  We generally accrue estimated
annual bonus costs evenly over the fiscal year, with certain quarterly adjustments related to terminations and hiring and changes in
expected financial or operational results.  Incentive bonuses related to any fiscal year are generally paid on May 31 following the
fiscal year end.



Accounting for Income Taxes

We make estimates related to our income taxes in each of the jurisdictions in which we operate. These
estimates include the allocation of revenue, cost of revenue, depreciation, expenditures and tax credits within and between
jurisdictions.  Deferred taxes are determined by calculation of the future tax consequences associated with differences between
financial accounting and tax bases of assets and liabilities. As a result of this process, we recognize deferred tax assets and
liabilities, which are recorded in our Consolidated Balance Sheets. A valuation allowance is established to the extent that we
consider it more likely than not that some portion or all of the deferred tax assets will not be realized. To the extent a valuation
allowance is established or adjusted in a period, this amount is included in our Consolidated Statements of Income as an expense or
benefit within the provision for income taxes.

**GENERAL**

Certain of the information required by this item has been previously reported under the heading "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in the Form 10-K.

Barra provides investment risk management solutions to financial professionals world-wide.  We have two business
units.  Our Core Business provides portfolio risk management and enterprise risk management systems to investment professionals.  Our
Ventures Business develops new lines of business by leveraging our core research and development, generally through strategic
partnerships.

Foreign Currency

As an international corporation, we generate revenue from clients throughout the world, maintain sales and
representative offices worldwide and hold certain deposits and accounts in foreign currencies.  Our revenue is generated from both
United States and non-U.S. currencies. Our subscriptions in the United Kingdom and the European Community are priced in British
pounds sterling (pounds) and euros, respectively. Additionally, our consolidated subsidiary, Barra Japan Co., Ltd. generates
revenues, has expenses and has assets and liabilities in Japanese yen (yen). All other international clients are billed in U.S.
dollars.  The functional and reporting currency of all non-U.S. operations is the U.S. dollar. Accordingly, gains and losses on
translation of current assets and liabilities denominated in foreign currencies to the U.S. reporting currency are included in other
operating expenses.

The following table presents a summary of revenue by geographic region for the three months ended December 31,
2003 and 2002 (in thousands).  Revenues are distributed to geographic areas based on the country in which the Barra sales office is
located:

`2003                          2002
                          ----------------------------- -----------------------------
                                          % of Total                    % of Total
                             Revenues       Revenues       Revenues       Revenues
                          -------------- -------------- -------------- --------------
Americas:
United States............       $19,558             51%       $18,253             52%
Other....................         1,096              3          1,042              3
                          -------------- -------------- -------------- --------------
Total Americas...........        20,654             54         19,295             55
                          ============== ============== ============== ==============

Europe and Africa:
United Kingdom...........         9,918             26          7,260             20
Germany..................         1,757              5          2,062              6
Other....................           124               -           209              1
                          -------------- -------------- -------------- --------------
Total Europe and Africa..        11,799             31          9,531             27
                          ============== ============== ============== ==============

Asia and Australia:
Japan....................         4,071             11          5,075             14
Other....................         1,659              4          1,285              4
                          -------------- -------------- -------------- --------------
Total Asia and Australia.         5,730             15          6,360             18
                          ============== ============== ============== ==============
                          -------------- -------------- -------------- --------------
TOTAL                           $38,183            100%       $35,186            100%
                          ============== ============== ============== ==============`

All other things being equal, weakening of the U.S. dollar has a positive impact on profits,
and strengthening of the U.S. dollar has a negative impact.  We attempt to mitigate our exposure to foreign currency fluctuations
through the use of forward commitments to sell certain foreign currencies. This hedging program is specifically designed to hedge our
net assets denominated in pounds, euros and yen. Gains and losses related to the hedges are recorded in current operating
results.

For the three month period ended December 31, 2003, when compared to the same period a year ago, the U.S. dollar
weakened against the pound, euro and yen. This had the effect of increasing net revenues and net income by approximately $1,435,000
and $782,000, respectively; compared to exchange rates in effect for the three month period ended December 31, 2002.

Under current operating arrangements in the countries in which we do business (other than Brazil), there are no
significant restrictions upon the flow of funds from our foreign subsidiaries to the parent company.  In Brazil, our local subsidiary
is required to register exchange agreements with the Brazilian Central Bank.



Liquidity and Capital Resources

As of December 31, 2003, our principal sources of liquidity were ourcash and cash equivalents,
marketable equity securities held for trading, and marketable debt securities available-for-sale totaling $205 million, representing
an increase of $5 million from March 31, 2003.  This increase is primarily attributable to cash collections on client accounts,
offset by funds use to repurchase our common stock and pay a dividend to our shareholders.

In addition to our available cash and cash equivalents and marketable securities, we have a commitment from a bank
for an unsecured short-term line of credit of up to $25 million, of which no amounts have been, or are presently anticipated to be,
drawn down on that line of credit.

During the quarter ended December 31, 2003 we generated $7.0 million of cash from operating activities as compared
to $8.1 million for the same period a year ago.  Cash flows from operating activities continue to be our principal means of
generating cash. (See our Condensed Consolidated Statements of Cash Flows in the accompanying financial statements.)

We believe that our cash flow from operations (including prepaid subscription fees), together with existing cash
balances, will be sufficient to meet cash requirements for capital expenditures, expected dividend payments and other cash needs for
ongoing business operations and existing financial commitments.



Principal Financial Commitments

Our principal financial commitments consist of obligations under operating leases and contracts for the use of
computer and office facilities.  Other than commitments described in this discussion and analysis and in the financial statements and
notes, we have no present binding understandings or commitments with respect to any significant capital expenditures.



Stock Repurchase Plan

On November 20, 2003, our Board of Directors authorized Barra to repurchase up to a total of 2,000,000 shares
of our Common Stock pursuant to our stock repurchase plan. As of December 31, 2003, 1,471,400 remained authorized to be repurchased.
We are under no commitment to purchase any shares under our stock repurchase plan.

**RESULTS OF OPERATIONS**

References to the dollar and percentage increases or decreases set forth below in this discussion and analysis
of our results of operations are derived from comparisons of our condensed consolidated statements of income and operating segment
results for the three and nine month periods ended December 31, 2003 and December 31, 2002.





Core Business - Risk Management

Revenues:

Revenue growth for our Core Business has slowed significantly over the past fiscal year as a result of fewer
subscription sales of our portfolio and enterprise risk products and higher cancellation rates on existing customer subscriptions as
compared to previous periods.  We believe these results reflect the general cost reduction measures many of our asset management
clients have initiated in reaction to declining investment returns and increased competition as a result of over-capacity in the
investment management industry.

Revenues from risk management products consist of annual subscription fees to portfolio and enterprise risk
management  products, license and maintenance fees on FEA products and royalty and other related revenues.  A summary of the
components of these revenues is as follows (amounts in thousands):

`Three Months Ended            Nine Months Ended
                                  December 31,                  December 31,
                             ----------------------------  -----------------------------
                               2003      2002    %Change     2003      2002     %Change
                             --------- --------- --------  --------- --------- ---------
Core product subscriptions..  $31,543   $29,382        7    $92,425   $86,268         7
Implementation fees.........      528       739      (29)     1,181     1,765       (33)
Royalty and other...........      605     1,038      (42)     2,356     2,813       (16)
FEA revenue.................    1,573         --       --     4,518         --        --
                             --------- --------- --------  --------- --------- ---------
TOTAL....................     $34,249   $31,159       10   $100,480   $90,846        11
                             ========= ========= ========  ========= ========= =========`

Core product subscriptions are revenues for our portfolio risk management and enterprise risk management
products, including related data updates.  We generally bill and collect fees on an annual basis, but recognize the revenue
1/12th per month over each year of the subscription period.  The growth in annual subscription fees continues to be
generated from a combination of obtaining new clients and increasing revenues from existing customers through the introduction of new
products, features, users and other services along with the impact of changes in foreign currency translation rates.  Annual
subscription revenue for the quarter ended December 31, 2003 increased $2,161,000 or 7% compared to the same quarter a year ago and
$6,157,000 or 7% compared to the same nine month period a year ago. Excluding the impact of changes in foreign currency translation
rates, subscription revenues in the current quarter increased 2% compared to the same quarter a year ago and 3% compared to the same
nine month period a year ago.  The increase in subscription revenues over both periods is the result of adding new customers and
subscriptions for our Enterprise Risk Management product, TotalRisk, offset in part by lower fees from our Equity and Fixed Income
portfolio manager products due to higher cancellation rates within these product lines for the reasons discussed above.



Implementation fees are revenues related to implementation services in connection with enterprise risk
management system installations. Implementation fees are recorded as earned, generally on a time and materials basis.  The timing of
the recording of enterprise risk management implementation fees is governed by the terms of the implementation contracts and other
factors that can cause significant variations from quarter to quarter.  The decrease in implementation fees reflects a decline in the
number of new enterprise risk system installations and general weakness in the demand for such services amidst spending constraints
at some of our client installations.





Royalty and other revenues include seminar and other one-time fees. The timing and number of seminars held in
any particular period can significantly affect the amount of revenue recorded for the period.



FEA revenue represents license and maintenance fees from our FEA subsidiary, which Barra acquired in
December 2002.  FEA develops derivative and risk analytics software for traders, risk managers and financial analysts, focusing on
the energy, financial and commodities markets.  Product license revenues for the quarter ended December 31, 2003 were $0.8 million
and related maintenance revenues were also $0.8 million. For the nine month period ended December 31, 2003, product license revenues
were $2.0 million and related maintenance revenues were $2.5 million.

Expenses:



A summary of core operating expenses is as follows (amounts in thousands):

`Three Months Ended            Nine Months Ended
                                  December 31,                  December 31,
                             ----------------------------  -----------------------------
                               2003      2002    %Change     2003      2002     %Change
                             --------- --------- --------  --------- --------- ---------
Communication, data and
  seminar...................   $1,871    $1,690       11     $6,126    $5,668         8
Compensation and benefits...   17,759    16,233        9     52,386    47,024        11
Occupancy...................    1,785     1,473       21      5,452     4,368        25
Amortization of acquired
  intangibles...............      350         --       --     1,050         --        --
Other operating expenses....    4,556     4,194        9     12,439    12,359         1
Restructuring charges.......        --        --       --     2,466         --        --
                             --------- --------- --------  --------- --------- ---------
TOTAL....................     $26,321   $23,590       12    $79,919   $69,419        15
                             ========= ========= ========  ========= ========= =========`

Communication, data and seminar costs



Compensation and benefitsincreased $1,526,000 or 9% compared to the same quarter a year ago and
increased $5,362,000 or 11% compared to the same nine month period a year ago. The increase reflects the payroll costs of the FEA
business which was acquired in December 2002. Excluding FEA, compensation and benefits increased $238,000 or 1% in the current
quarter and increased $1,578,000 or 3% compared to the same nine month period a year ago.  The increases in both periods reflect
lower average headcount as a result of the workforce reduction in April 2003 offset by higher costs for benefits and incentive
compensation.



Occupancy expenseincreased $312,000 or 21% compared to the same quarter a year ago and $1,084,000 or
25% compared to the same nine month period a year ago.  The increase is due primarily to rental costs for FEA facilities, along with
higher rental and utility costs for existing offices. Excluding FEA, occupancy costs for the current quarter increased $118,000 or 8%
compared to the same quarter last year and increased $537,000 or 12% compared  to the same nine month period a year ago.

Amortization of acquired intangibles relates to intangibles with estimated remaining useful lives acquired in connection with
the FEA and IPO transactions.  These intangibles are being amortized over two to six years.  At the beginning of fiscal 2002, we
adopted SFAS No. 142 - Goodwill and Other Intangible Assets (SFAS No. 142), which prohibits the amortization of goodwill and
indefinite-lived intangible assets.  SFAS No. 142 requires these assets to be tested annually for impairment.



Other operating expensesincreased $362,000 or 9% compared to the same quarter a year ago and
increased $80,000 or 1% for the same nine month period a year ago.  Other operating expenses include travel, office, maintenance,
depreciation, amortization, marketing, advertising, insurance, outside legal and accounting services, and other corporate expenses.
The increase in the current quarter is primarily the result of higher insurance and travel costs and operating expenses associated
with FEA, offset by lower legal costs. The increase in the nine month amount primarily reflects higher insurance, travel and FEA
operating costs offset by lower advertising and legal costs.



Restructuring charges represent costs, primarily severance, associated with a workforce reduction of
approximately 9% of employees implemented in April 2003.







POSIT



Revenues:



POSIT revenues decreased $93,000 or 2% compared to the same quarter a year ago and decreased $563,000 or 4%
compared to the same nine month period a year ago. Our revenues from POSIT come from royalties paid to the POSIT joint venture based
on commissions generated by the trading volume in the various POSIT systems. The current quarter increase reflects a decline in U.S.
POSIT royalties offset by higher European POSIT royalties. The increase in European POSIT royalties resulted from higher trading
volumes and an increase in the royalty rate. The decline in the nine month period comparison reflects principally the impact of lower
trading volumes on the U.S. POSIT trading system due to lower overall market trading volumes and increased price competition.



Expenses:



POSIT operating expenses represent costs incurred by Barra to fulfill our obligations to the POSIT joint
venture with ITG, Inc.  A summary of POSIT operating expenses incurred by Barra is as follows (amounts in thousands):

`Three Months Ended            Nine Months Ended
                                  December 31,                  December 31,
                             ----------------------------  -----------------------------
                               2003      2002    %Change     2003      2002     %Change
                             --------- --------- --------  --------- --------- ---------
Communication, data and
  seminar ..................       $1        $2      (50)       $13       $11        18
Compensation and benefits...      452       591      (24)     1,461     1,481        (1)
Occupancy...................       67        60       12        214       170        26
Other operating expenses....       67       170      (61)       203       520       (61)
                             --------- --------- --------  --------- --------- ---------
TOTAL....................        $587      $823      (29)    $1,891    $2,182       (13)
                             ========= ========= ========  ========= ========= =========`

Compensation and benefits decreased $139,000 or 24% from the same quarter a year ago and decreased $20,000
or 1% compared to the same nine month period a year ago. The decrease in the current quarter reflects lower incentive compensation
costs.



Occupancy costs increased $7,000 or 12% compared to the same quarter a year ago and increased $44,000 or
26% compared to the same nine month period a year ago. The increases were due to higher rental and utility costs in the office where
POSIT personnel are located.



Other operating expenses decreased $103,000 or 61% compared to the same quarter a year ago and decreased
$317,000 or 61% compared to the same nine month period a year ago. The decreases are due primarily to lower support costs and
corporate expense allocations.



Equity in Income of Investees

Equity in income and loss of investees represents net gains from our equity investment in Australian
POSIT.



Other Ventures

Equity in income and loss of investees represents net losses from our equity investment in Risk Reporting
Limited.



Interest Income and Other

Interest income and other increased $297,000 or 27% compared to the same quarter a year ago and decreased
$3,126,000 or 48% compared to the same nine month period a year ago. The increase in the current quarter reflects higher unrealized
gains on marketable equity securities.  The decrease in the nine month period was due to higher realized gains in the prior nine
month period related to the sale of investments in marketable debt securities available for sale as a part of restructuring the
investment portfolio in June and July of 2002.





Income Taxes

Our tax rate on income from continuing operations for the quarter and nine months ended December 31, 2003
was approximately 32% compared to 28% for the same quarter last year and 32% for the same nine month period a year ago. The 28% rate
for quarter ended December 31, 2002 reflected an adjustment to bring the fiscal year to date 2003 year tax rate in line with the
expected overall effective rate for the year.



Discontinued Operations - Gain on Sale, net

Gain on sale of discontinued operations for the quarter ended December 31, 2003 of $2.5 million, net of
income taxes, represents a contingent payment received from the sale of our interest in Symphony Asset Management LLC (Symphony).
The terms of the sale of our interest in Symphony to the John Nuveen Company included up to approximately $12 million in additional
future payments, contingent on Symphony's business exceeding specific growth and profitability targets.  Contingent payments are
recorded only as received in accordance with generally accepted accounting principles.  The December 2003 quarter marks the end of
our potential to receive quarterly contingent payments.  Since the sale of Symphony in July 2001 we have received gross contingent
payments of approximately $9.7 million.  We have the potential to receive up to an additional approximately $2.3 million in
contingent consideration based on Symphony's annual financial performance over the five years following the sale, which will next be
measured at the end of September 2006.





RISK FACTORS

This Form 10-Q contains forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995.  These forward-looking statements give our current expectations or forecasts of future actions, events
or results.  You can identify these statements by the fact that they do not relate strictly to historical or current facts.  They use
words such as anticipate, estimate, expect, intend, believe, designed, future, forecast, perceive, possible, potential, may, will,
would, could, should, forward, assure and other words and terms of similar meaning in connection with any discussion of future
operating or financial performance.  Our forward-looking statements include statements concerning our future financial results,
market activities, product development and business model.  From time to time we may also provide oral or written forward-looking
statements in other materials that become publicly available.

Any or all of the forward-looking statements that we make in this Form 10-Q or any other public statements we
issue may turn out to be wrong.  They can be affected by inaccurate assumptions that we might make or by known or unknown risks and
uncertainties.  Many factors described in this Risk Factors section and elsewhere in this Form 10-Q may cause our actual results to
vary materially from our historical or expected results.  Other factors, besides those discussed below could also adversely affect us
or our business.  Consequently, no forward-looking statement can be guaranteed.

We are under no obligation to publicly update any forward-looking statements, whether as a result of new
information, future events or otherwise.  We suggest, however, that you consult any future disclosures we make on related subjects in
our subsequent Form 10-Q, 8-K and 10-K filings with the Securities and Exchange Commission (SEC).



Fluctuations in Quarterly Operating Results

Our revenues and results of operations are difficult to predict and may fluctuate substantially from quarter
to quarter, as they have in the past.  Factors specifically relating to our business segments are outlined below:



- Core Business - Our Core Business revenues in any quarter depend substantially upon our total
contracting activity (including renewals of existing contracts) and the related timing of when new subscriptions begin.   We derive
revenue from our Core Business primarily through annual subscriptions that automatically renew unless canceled.  There is no
assurance that these renewals will continue. In recent quarters we have experienced significant subscription cancellations at rates
higher than our historical averages.  Such cancellations can have a material adverse effect on our business, financial condition and
results of operations.  Annual subscription fees are recorded as revenues over each subscription period at the rate of
1/12th per month.  Sales of subscriptions in any one-month therefore impact reported revenues evenly over the next twelve
months.

Sales of financial analytics by our FEA subsidiary potentially are subject to greater variability than our other
product revenues.  FEA sales historically have been made on a one-time perpetual license fee basis, and the fees from these perpetual
licenses are recorded as revenues in the quarter in which the sale is completed.  As a result, Core Business revenues from the sale
of FEA products can be subject to quarterly fluctuations depending on our ability to close business in any particular quarter.  FEA
is in the process of changing its licensing model from the one-time perpetual license fee basis to an annual subscription basis.
These annual subscription fees would be recorded as revenue over the duration of the subscription period at the rate of
1/12th per month.  However, we may not be successful in transitioning FEA customers to this new license fee model, and
revenues from our FEA subsidiary may therefore continue to be subject to greater variability than our other Core Business revenues.

We also include enterprise risk management system implementation consulting fees in our Core Business revenues.
These fees reflect non-recurring, project driven revenues that are implemented in phases as contractual milestones are met.
Accordingly, they can be susceptible to a large degree of variability depending on our ability to source new projects and the
unpredictable nature and significance of fees associated with specific transactions.

Our earnings can be affected in our second fiscal quarter because of annual salary adjustments for our employees
in July.  In addition, our compensation policy historically has involved significant reliance on discretionary bonuses.  Because
compensation expense is a significant percentage of our operating expenses, the amount of, timing of and accrual for salary
adjustments and discretionary bonuses could have a material effect on the net income of our Core Business.



- Ventures Business - Diverse factors cause variability of operating results in our POSIT Venture Business.
The several POSIT systems can experience and have experienced major fluctuations in trading volume.  Since approximately 10% of our
operating revenue in the third quarter and nearly all of our Venture Business income in the third quarter came from this venture,
these fluctuations can have and have had a significant impact on our revenue and operating income.  POSIT trading volume is also
directly affected by factors such as economic and political conditions that may lead to decreased trading activity and commission
prices in the securities markets generally.  For example, our revenues from POSIT declined 29% in fiscal 2003 as compared to the
prior fiscal year, reflecting decreased trading activity that was largely attributable to the difficult market conditions and major
declines in trading volumes during fiscal 2003.  The future economic environment will be subject to periodic downturns, such as
recessions.  As we actually saw in fiscal 2003, these downturns could result in substantially reduced trading volume and prices,
which could materially reduce our revenue and operating income.

Our operating expenses are based in part on our expectations regarding future revenue.  Our consolidated operating
results may be adversely affected if revenue does not develop in a quarter as anticipated.  Since expenses are usually incurred
before revenues are generated, and because only a small amount of expenses vary with revenue, our consolidated operating results may
be impacted significantly by lower revenues.  Various factors could cause these lower revenues and could affect quarter to quarter
comparisons.  Also, much of our revenues are earned under fixed price software subscriptions.  Changes in our costs of providing
those subscriptions could have a material adverse effect on our business, financial condition and results of operations.

Accounting standards and practices may require us to defer recognition of license revenue for a significant period
after entering into a license agreement.  Generally, the subscription fees for our Core Business products are initially deferred as
unearned revenues when payment has been received, after which revenue is recognized ratably over the term of the subscription.
Negotiated terms for some of our Core Business sales and consulting services, particularly enterprise risk management solutions,
sometimes do not permit revenue recognition at the time of delivery or even as work on the project is completed.

Changes in General Economic Conditions

The U.S. and certain other economies in which we operate have experienced slower growth after an extended
period of growth in previous years.  As a result, assets under management have decreased, thereby decreasing the revenues to asset
managers.  Such reduced asset management revenues have placed pressure on our clients to cut their cost of services, which in turn
has adversely impacted our sales, renewal rates and ability to increase or even maintain prices.  These negative trends may
continue.



Product Development and Technological Change

The markets in which we compete are characterized by rapidly changing technologies, extensive research, and
new product introductions.  Our future growth and financial performance will depend on our ability to continue to quickly develop and
introduce new products and enhance our existing products in response to advances in finance theory and computer technology, changing
market conditions and increasingly sophisticated customer requirements.  We may not be able to enhance existing products or develop
and introduce new products that receive market acceptance in a timely manner.  Our failure to anticipate or respond adequately to
changing market conditions could have a material adverse effect on our business, financial condition, or results of operations.
Because we offer products across many geographic areas and many areas of specialization, we often must restrict our product
development efforts to a limited number of products and operating platforms.  There can be no assurance, however, that efforts we
select will be successful or will achieve market acceptance.  In addition, the cost of research and development efforts required to
keep pace with technological changes may, at times, have a significant effect on our business, financial condition, or results of
operations.

Dependence on Key Personnel

Our future success will depend in large part on our ability to attract, train and retain highly skilled
managerial, research, development, sales, marketing, support, technical and services personnel.  Competition for people in the
software and financial services industries is intense.  At times, we have experienced difficulty in locating candidates with
appropriate qualifications and expertise.  We also frequently compete with financial institutions and financial services
organizations for personnel.  These organizations generally have greater resources than we do and often offer significantly higher
compensation packages to potential employees.   In November 2003 we announced a succession plan for our Chief Executive Officer,
Kamal Duggirala, who intends to resign his position when a successor is hired.  There can be no assurance that we will be able
attract qualified candidates to fill this critically important position in the near future.  In general, our inability to attract,
train and retain key personnel could have a material adverse effect on our business, financial condition, or results of
operations.

Dependence on Availability of Data

We currently obtain data from over 120 third-party vendors that is used in our products and services.  Any
termination or interruption of our supply of data from a principal data vendor or vendors, or an interruption of our own data
operations or data update processes could have a material adverse effect on our business, financial condition or results of
operations.  These adverse effects include, for example, our products or services becoming inoperable or their performance being
materially reduced.

If any of our third-party vendors change their data offerings, we may need to incur additional costs to ensure
continued performance of our products and services.  In addition, if the cost of licensing any of these third-party data products
materially increases, our gross margin levels could materially decrease.

International Operations

In the third quarter of fiscal 2004 over 49% of our revenues came from customers outside the United States. We
anticipate that revenues from customers outside the U.S. will continue to be a significant part of our total revenues for the
foreseeable future.  Sales and operations outside the U.S. are subject to unique risks, including:



- unexpected changes in regulatory requirements;
- unexpected changes in exchange rates, tariffs and other trade barriers;
- political or economic instability;
- seasonal factors, particularly in Europe;
- difficulties in staffing, managing and integrating foreign operations;
- longer payment cycles;
- difficulties or delays in translating products and related documentation into
foreign languages;
- currency fluctuations and conversion risks; and
- potentially adverse tax consequences.

Any of these factors could have a material adverse effect on our business, financial condition or results of operation.

Risks Associated with Business Combinations and Divestitures

As part of our overall strategy, we may continue to divest ourselves of certain businesses and assets, to
acquire or invest in complementary companies, products, and technologies and to enter into joint ventures and strategic alliances
with other businesses.  For example, in fiscal 2003 we acquired two businesses - Financial Engineering Associates, Inc. (FEA) and
Investment Performance Objects Pty Ltd. (IPO).

Some common risks associated with acquisitions and joint ventures include:

- the difficulty of assimilating the operations and personnel of the combined companies;
- the risk that we may not be able to integrate the acquired technologies or products with our own;
- the substantial management time devoted to such activities;
- undisclosed liabilities;
- the inability of management to maximize our financial and strategic position through the successful
integration of acquired businesses;
- the risk that the acquired business will not achieve anticipated earnings and revenues;
- the failure to realize anticipated benefits (such as cost savings and synergies);
- customer dissatisfaction with, or problems caused by, the performance of any acquired technologies;
and
- geographic dispersion of operations and the complexities of international operations.



Some common risks associated with divestitures include:

- the inability to fulfill representations and warranties made to a buyer;
- the risk that the divested business will not meet the revenues or earnings requirements necessary to achieve
subsequent earn-out goals;
- the failure to remain within the scope of any non-competition undertakings requested by a buyer;
- the transitioning of the divested business to a stand-alone operation that is separate from the research,
development and support services previously offered by Barra; and
- costly litigation stemming from post-closing disputes.

We may not be successful in overcoming these risks or any other problems encountered in these transactions.

Limited Protection of Intellectual Property and Proprietary Rights and Potential Infringement of Third Party
Intellectual Property Rights

We consider certain aspects of our products, related internal data update processes and services to be
proprietary. We rely primarily on a combination of trade secret, patent, copyright, trademark and other intellectual property laws,
license agreements and technical measures to protect our rights in our intellectual property.  Despite our efforts, a third party may
still try to challenge, invalidate or circumvent the protective mechanisms that we select.  We cannot assure that any of the rights
granted under any copyright, trademark or patent that we may obtain will protect our competitive advantages.  Our competitors may
also independently develop and patent technology that is the same or similar to ours or may obtain access to our proprietary
technology.  In addition, the laws of certain foreign countries in which we operate do not protect our proprietary rights to the same
extent as do the laws of the United States.  Also, some elements of our products and services are not subject to intellectual
property protection.

We believe that our products, processes and trademarks do not infringe the intellectual property rights of third
parties.  There can be no assurance, however, that the intellectual property which we have acquired or developed will not be
challenged by infringement claims in the future.  Such claims could require us to enter into royalty arrangements or could result in
costly litigation.



- Trademarks - We have registered "Barra" as a trademark in the U.S. and in certain foreign countries.
We have also registered other product trademarks and certain service marks in the U.S. and in certain foreign countries.  When we
enter a new geographic market or introduce a new product brand, there can be no assurance that our existing trademark or mark of
choice will be available.



- Patents - Businesses operating in the financial services sector, including our
competitors and potential competitors, have in recent years increasingly pursued patent protection for their technologies and
business methods.  We currently hold one design patent and our FEA subsidiary holds utility patents for four inventions.  We are
currently applying for four utility patents on certain of our proprietary technologies.  Patent applications can be extremely costly
to process and defend.  We cannot assure that we will be issued any patents that we apply for, nor can we assure that any of the
rights granted under any patent that we obtain will protect our competitive advantages.  Under current law, we do not believe it is
feasible to determine in advance whether any of our existing products or any of their components or a service or method infringes on
the patent rights of others.  From time to time we will receive notices from others containing claims or potential claims of
intellectual property infringement, including patent infringement.  We may also be called upon to defend a joint venture partner,
customer, vendor or licensee against such third party claims under indemnification clauses in our contracts.  Responding to these
types of claims, regardless of merit, could consume valuable time, result in costly litigation or cause delays, all of which could
have a material adverse effect on our business, operating results or financial condition.  Responding to these claims could also
require us to enter into royalty or licensing agreements with third parties claiming infringement.  There can be no assurance that
these licenses will be made, if at all, on terms acceptable to us.
- License Agreements - The software and data products of our Core Business and Ventures Businesses are
generally licensed to end users on a periodic subscription basis in a nontransferable license signed by the client.  We also permit
access to some products through the internet under on-line licenses that are acknowledged by the licensee.  The enforceability of
these on-line licenses has not been conclusively determined by the courts.  We are frequently required to obtain licenses to the
proprietary rights of third-party data and software vendors or others.  There can be no assurance that these licenses will be made,
if at all, on terms acceptable to us.



- Trade Secret and Copyright - Existing trade secret and copyright laws only offer us limited protection
for our proprietary assets.  We believe that the rapid pace of technological change in the software and investment solution
industries and the major increase of business method patents in these industries will only make trade secret and copyright protection
less significant over time.  We have not obtained registered copyright protection for any of our software applications or other
intellectual property.  Consequently, our competitors may independently develop and patent technologies that are substantially
equivalent, or superior, to our technology.  To protect the proprietary assets of our Core Business, we also rely on the following
unique aspects of our business:

- the development, maintenance, support and use of our products is dependent upon the knowledge, experience and
ability of our highly skilled, educated and trained employees;



- most of the software in our products is dependent upon (and of little value without) continuing access to the
historical and current data in our proprietary databases; and



- the nature of our proprietary database, aggregated and derived over the course of a quarter century, makes it
extremely difficult to replicate.



- Confidentiality Undertakings - Our license agreements restrict clients' disclosure of proprietary
information contained in our products.  Our joint venture and development agreements typically contain similar restrictions.  It may
be possible, however, for unauthorized parties to copy aspects of our products or to obtain and use information that we regard as
proprietary. We also seek to protect our proprietary information through non-disclosure agreements with our employees.  However, the
enforceability of these agreements varies due to the many different jurisdictions in which our employees, joint venture or
development partners and clients are located.



Competition

Each of the markets in which our Core and Ventures Businesses operate has become increasingly competitive in
recent years, particularly in the last several quarters.  These markets may continue to become more competitive in the future as a
result of the activities of existing competitors and the entrance of new competitors into our markets.  We have seen significantly
greater competition recently in our Core Business from clients developing risk management systems in-house, as well as from firms
offering competing products at lower rates.  In some of our markets, our competitors have substantially greater name recognition,
installed client bases, or financial, research, development or other resources.  Our POSIT business in particular competes with
services offered by a wide variety of organizations, including brokerage and transaction processing firms, securities exchanges,
electronic communications networks (ECNs) and alternative trading systems (ATSs).  Many of POSIT's competitors and potential
competitors have substantially greater financial, research and development and other resources.  In addition, some of these
competitors offer services similar to POSIT at lower rates or have indicated that they may provide services similar to POSIT in the
future.  There can be no assurance that:



- we and/or our business partners will continue to have sufficient resources to succeed in our efforts and be
successful in maintaining our competitive advantages;
- our competitors will not devote significantly more resources to competing activities;
- our competitors will not develop products or services that are perceived as being superior to ours;
or
- increased competition will not lead to loss of market share or increased pricing pressure.



Web-Based Products and Services

Our BarraOne, Barra Credit and Risk Factor products make use of a web browser as the user interface in place
of traditional desktop access through networked personal computers, and it is anticipated that future Barra products may also use a
web interface.  In addition, regular updates of data required to make our products properly function are frequently carried out via
the internet.  Access to software or data via the internet or an intranet involves numerous risks inherent in using the internet,
including security, availability and reliability. In addition, there is a risk that customers will not be willing or able to
implement internet-based applications.  Barra may wish to offer its applications on future or existing user interfaces that achieve
popularity within the financial application marketplace.  These future or existing user interfaces may or may not be architecturally
compatible with Barra's current software product design.  Barra may not be able to support new user interfaces and achieve market
acceptance of new user interfaces that it does support.



Security Risks and Concerns May Deter the Use of the Internet for Conduct of Business.

A significant barrier to commerce and communications over public networks is the secure transmission of
confidential information. Advances in computer capabilities, new discoveries in the field of cryptography or other events or
developments could result in compromises or breaches of our security systems or those of other web sites to protect proprietary
information.  If any well-publicized compromises of security were to occur, they could have the effect of substantially reducing the
use of the internet for commerce and communications.  Anyone who circumvents our security measures could misappropriate proprietary
information or cause interruptions in our services or operations.  The internet is a public network, and data is sent over this
network from many sources.  In the past, computer viruses (software programs that disable or impair computers) have been distributed
and have rapidly spread over the internet. Computer viruses could be introduced into our systems or those of our clients or other
third parties, which could disrupt or make it inaccessible to clients.  We may be required to expend significant capital and other
resources to protect against the threat of security breaches or to alleviate problems caused by breaches. To the extent that our
activities may involve the storage and transmission of proprietary information, security breaches could expose us to a risk of loss
or litigation and possible liability.  Our security measures may be inadequate to prevent security breaches, and our business could
be harmed if we do not prevent them.



Volatility of Stock Price; Risk of Litigation

The trading price of Barra common stock has in the past and may in the future be subject to significant
fluctuations in response to many factors, some of which include:



- revenue, client cancellation rates, or results of operations in any quarter failing to meet the expectations
(published or otherwise) of the investment community, and the timing of the announcements of such shortfalls;
- changes in recommendations or financial estimates by securities analysts;
- acquisitions or sales of significant businesses;
- timing of new product releases and announcements;
- conditions and trends generally in the industries in which we operate;
- adoption of new accounting standards affecting the software or financial services industries; and
- general market conditions.



Further, the stock market has experienced and may continue in the future to experience extreme price and volume
fluctuations that particularly affect the market prices of equity securities of high technology and financial services companies.
These fluctuations often are not related, or are disproportionate, to the operating performance of those companies.  These broad
market fluctuations, as well as general economic, political and market conditions, have had and may continue to have a material
adverse effect on the trading price of Barra common stock.  Fluctuations in the price of our common stock may expose us to the risk
of securities class action lawsuits or claims.  Any such suit or claim, even if the outcome were to be ultimately favorable to us,
would involve a significant commitment of our management, personnel, financial and other resources.  In addition, these sorts of
claims and lawsuits could have a material adverse effect on our business, financial condition, or results of operations.



Management of Growth and Changes in Staffing

We have historically experienced periods of:

- revenue growth;
- growth into new foreign markets;
- expansion of our Core Business and Ventures Businesses, including POSIT; and
- substantial fluctuations in the number of our employees.



These changes have resulted in new and increased responsibilities for our management and have placed a significant
strain on our operating and financial controls and other resources.  To accommodate growth, compete effectively, and manage potential
future growth, we must continue to implement and improve the speed and quality of our products and services, management decisions,
reporting systems, procedures, and controls.  Our personnel, procedures, systems, and controls may not be adequate to support our
future operations.



Potential Liability Based on Use of Products and Services

Our products and services support the investment and/or risk management processes of clients that collectively
manage trillions of dollars in assets.  Our license and consulting agreements have provisions designed to limit our exposure to
potential liability claims brought by our clients or other third parties based on the use of our products and services.  However,
these provisions could be invalidated by unfavorable judicial decisions or by federal, state, foreign or local laws.  Use of our Core
Business and Ventures Businesses products and services for the investment and/or risk management processes creates the risk that
clients, or the parties whose funds are managed by our clients, may pursue a claim against us for massive dollar amounts.  Any such
claim, even if the outcome were to be ultimately favorable to us, would involve a significant commitment of our management,
personnel, financial and other resources.  In addition, these sorts of claims and lawsuits could have a material adverse effect on
our business, financial condition, or results of operations.



Government Regulations

The financial services industry is subject to extensive regulation at the federal and state levels, as well as
by foreign governments.  It is very difficult to predict the future impact of the broad and expanding legislative and regulatory
requirements affecting our businesses.  If we fail to comply with any applicable laws, rules or regulations, we could be subject to
fines, penalties, suspensions or revocations of licenses or permits.  We believe that our existing products and services comply with
all applicable laws, rules and regulations.  However, there can be no assurance that these laws, rules or regulations will not change
in the future, or that such changes will not materially adversely affect our business, financial condition or results of
operations.



- Soft Dollars - A Soft Dollar arrangement is one in which a portion of the commission paid
by a brokerage client to a broker-dealer is allocated to pay for research services.  In Barra's case, brokerage clients including
money managers, fund sponsors and consultants direct their brokers to use "soft dollars" generated by their advised
accounts to purchase our Core Business products and services.  Although the client enters into a contract with Barra directly (and
remains ultimately responsible for payment), Barra receives its payment in cash from the broker.  For several years the investment
community has debated the purchase of goods and services with funds derived from soft dollar accounts, and the practice is regulated
in the U.S. by the SEC and the Department of Labor.  In recent months the SEC and Congress have placed increased scrutiny on soft
dollar practices, and some commentators have advocated abolishing soft dollars entirely.  For the nine months ending December 31,
2003, payments received by Barra that were attributable to soft dollar arrangements accounted for approximately 22% of our Core
Business revenue.  Legal or regulatory changes may restrict or prohibit us from providing services to money managers in soft dollar
arrangements.  Such changes, as well as the regulatory uncertainty surrounding any potential changes, could have a material adverse
effect on our business, financial condition, or results of operations.
- Investment Advisers Act - We believe and have adopted the position that our Core Business products do
not provide investment advice for purposes of the Investment Advisers Act of 1940, the Advisers Act, or similar laws in states or
foreign jurisdictions.  Future developments in our product line or in the regulatory environment could cause this status to change.
If that happens, we may have to broaden our disclosures to the relevant regulatory agencies and to adopt the strict compliance
procedures mandated by these laws for a much broader segment of our business.  These heightened obligations would likely entail
substantial additional costs to us.



- Data Privacy Legislation - Changes in legislative, regulatory or consumer environments relating to
consumer privacy or information collection and use may affect our ability to collect and use data.  There could be a material adverse
impact on our direct marketing, data sales and business due to the enactment of legislation or industry regulations, or simply a
change in customs, arising from public concern over consumer privacy issues. Restrictions could be placed upon the collection,
management, aggregation and use of information that is currently legally available, in which case our cost of collecting some kinds
of data could materially increase. It is also possible that we could be prohibited from collecting or disseminating certain types of
data, which could in turn materially affect our ability to meet our clients' requirements.



- ATS - Our joint venture partner ITG currently operates POSIT and a continuous trading system owned by
our POSIT joint venture called TriAct as part of its broker-dealer operations in accordance with Regulation ATS.  Accordingly,
neither POSIT nor TriAct are registered with the SEC as an exchange.  There can be no assurances that the SEC will not in the future
seek to impose more stringent regulatory requirements on the operation of alternative trading systems such as POSIT or TriAct.  In
addition, certain of the securities exchanges have actively sought to have more stringent regulatory requirements imposed upon
automated trade execution systems.  There can be no assurance that Congress will not enact additional legislation applicable to
alternative trading systems.  Any such additional regulations or laws could undermine the feasibility of operating POSIT or TriAct.
Loss of POSIT revenues would materially adversely affect our financial condition and results of operations.



Catastrophic Events

Our operations depend on our ability to protect our equipment and the information stored in our databases
against fires, earthquakes and other natural disasters, as well as power losses, telecommunications failures, unauthorized
intrusions, terrorist attacks on financial centers where we or our clients are located, and other catastrophic events.  There is no
assurance that the measures we have taken to reduce the risk of interruption in our operations caused by these events are sufficient.
Such events could have a material adverse effect on our business, financial condition or results of operations.  For example, our
office in New York was temporarily closed due to the September 11, 2001 terrorist attacks.  Immediately after the terrorist attacks,
our clients who were located in the World Trade Center area were concentrating on disaster recovery rather than licensing additional
risk management products.   In addition, delivery of some of the data we receive from New York-based vendors was delayed.  The
grounding of transportation impaired our ability to conduct sales visits and deliver professional services at client sites.  During
the resulting temporary closure of the U.S. stock markets, POSIT clients were unable to trade over the system and some of the data
updates supporting our Core Business were interrupted.  These types of interruptions could affect our ability to sell and deliver
products and services and could materially adversely affect our business, financial condition, or results of operations.



Possible Adverse Effects of Option Exercises

If holders of options to purchase our common stock exercise any significant number of these options and resell
the underlying shares, the market price of Barra common stock could decline.  At December 31, 2003, there were outstanding vested and
exercisable options to purchase approximately 1.8 million shares of Barra common stock issued under various Barra stock option plans.
As of that date, options (vested and unvested) to purchase about 2.2 million shares of Barra Common Stock had exercise prices
below our closing common stock price on the last trading date of the fiscal quarter, December 31, 2003 ($35.57).



Effect of Certain Charter and Bylaw Provisions and Anti-Takeover Provisions; Possible Issuance of Preferred
Stock

Our Certificate of Incorporation, Bylaws, and certain Delaware laws contain provisions that may discourage a
third party from acquiring Barra.  This may deprive stockholders of certain opportunities to receive a premium for their shares as
part of an acquisition of Barra.

In addition, we have adopted a stockholder rights plan and declared a dividend distribution of one right for each
outstanding share of common stock to stockholders of record as of September 7, 2001. Each right, when exercisable, entitles the
holder to purchase one unit consisting of one one-thousandth of a share of our Series A Junior Participating Preferred Stock for
$200 per unit. Under certain circumstances, if a person or group acquires 15% or more of our outstanding common stock, holders of the
rights (other than the person or group triggering their exercise) will be able to purchase, in exchange for the $200 exercise price,
shares of our common stock or of any company into which we are merged having a value of $400. The rights expire on September 7,
2011 unless extended by our board of directors.  Because the rights may substantially dilute the stock ownership of a person or group
attempting to acquire us without the approval of our board of directors, our rights plan makes it more difficult for a third party to
acquire us (or a significant percentage of our outstanding capital stock) without first negotiating with our board of directors.



Impact of Legal and Regulatory Proceedings

Elsewhere in this Form 10-Q and in our most recent Form 10-K, we have made various disclosures regarding
litigation proceedings, as well as the possibility of certain other legal and regulatory proceedings.  See "Legal
Proceedings" below.  Many factors may affect the outcome of such proceedings.  Accordingly, until such proceedings are finally
resolved, it is difficult to determine the likelihood of a favorable outcome, the direct and indirect costs associated with the
proceeding, or, in the event of an unfavorable outcome, the amount of any loss.  Any proceeding, even if the outcome were to be
ultimately favorable to us, could involve a significant commitment of our management, personnel, financial and other resources.  This
alone could have a material adverse effect on our business, financial condition, or results of operations.

**Item 3.         Quantitative and Qualitative Disclosures About Market Risk**

Interest Rate Risk

Our exposure to market risk for changes in interest rates relates primarily to the interest bearing portions
of our direct investment portfolio. We place our direct investments with high quality credit issuers and, by policy, limit the amount
of credit exposure to any one issuer. Our first priority is to reduce the risk of principal loss. Consequently, we seek to preserve
our invested funds by limiting default risk, market risk, and re-investment risk.  We attempt to mitigate default risk by investing
only in high quality credit securities that we believe to be low risk and by positioning our portfolio to respond appropriately to a
significant reduction in credit rating of any investment issuer or guarantor. The direct investment portfolio includes only
marketable securities with active secondary or resale markets to ensure portfolio liquidity.

Our direct interest bearing investment portfolio primarily consists of investments in short-term, high-credit
quality money market funds and U.S. Treasury Securities. These investments totaled approximately $36.6 million at December 31, 2003
with an average interest rate of 0.8%. At December 31, 2003, the portfolio also had approximately $152.3 million of short-term, U.S.-
backed debt securities with an average taxable equivalent interest rate of 1.67%.  The short-term money market funds are not insured
and, because of the short-term nature of the investments, are subject to credit risk, but are not likely to fluctuate significantly
in market value.





Equity Market Risk

We had approximately $15.7 million at December 31, 2003 invested in investment products managed by our former
Symphony venture.  These investments are in primarily market-neutral programs, are non-interest bearing and consist principally of
long and short positions placed directly through other fund managers in U.S. and non-U.S. equity securities of both public and
private issuers. Although the intent of the managers of these funds is to structure portfolios that are hedged against general market
movements, these investments can be subject to significant changes in market value and are not insured. All investment decisions with
respect to these market neutral programs are made by professional investment advisers and the performance of the funds is reviewed
periodically by our management.



Foreign Currency Risk

We invoice customers in Europe in both pounds and euros.  In Japan, we bill our customers in yen.  Excluding
customers in these locations, we generally bill for our services in U.S. dollars.  To the extent we invoice our customers in local
currency (yen, pound and euro), our international revenues are subject to currency exchange fluctuation risk.  To the extent that
international revenues that are invoiced in local currencies increase in the future, our exposure to fluctuations in currency
exchange rates will correspondingly increase. Currency fluctuations may also effectively increase the cost of our products and
services in countries in which customers are invoiced in U.S. dollars.



We have a hedging program in place which is designed to reduce our exposure to fluctuations in certain foreign
currency translation rates from holding net assets denominated in foreign currencies. The program utilizes forward contracts for the
sale of foreign currencies to hedge our net asset exposure, consisting principally of cash and receivables denominated in pounds,
euros and yen. Gains and losses on the contracts are accounted for as other operating expense, net each period.  At December 31,
2003, we had one contract to sell 500 million yen at 106.98, maturing on February 3, 2004. Also at December 31, 2003, we had one
contract to sell 5 million euro at 1.2507, maturing on February 3, 2004. Additionally, at December 31, 2003, we had one contract to
sell 5 million pounds at 1.7684, maturing on February 3, 2004.   We enter into forward currency contracts only with approved counter-
parties and all hedging activities are reviewed by our Foreign Exchange Committee. Our hedging program is currently designed only to
reduce our exposure to gains and losses that result from translating our foreign assets and liabilities into U.S dollars. It does not
currently limit or reduce the exposure we have from fluctuations in currency exchange rates on our reported revenues that are billed
in non-U.S. currencies.

We have no foreign debt and our non-U.S. dollar cash balances held overseas are generally kept at levels necessary
to meet current operating and capitalization needs.

**Item 4.         Controls and Procedures**

We maintain disclosure controls and procedures that are designed to ensure that information required to be
disclosed in our reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the
time periods specified in the SEC's rules and forms and that such information is accumulated and communicated to our management,
including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required
disclosure. In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and
procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control
objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and
procedures.  Also, we have investments in certain unconsolidated entities. As we do not control or manage these entities, our
disclosure controls and procedures with respect to such entities are necessarily substantially more limited than those we maintain
with respect to our consolidated subsidiaries.

As required by SEC Rule 13a - 15(b), we carried out an evaluation, under the supervision and with the
participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the
design and operation of our disclosure controls and procedures as of the end of the quarter covered by this report. Based on the
foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were
effective at the reasonable assurance level.

There has been no change in our internal controls over financial reporting during our most recent fiscal quarter
that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.





PART II -- OTHER INFORMATION

**ITEM 1.   LEGAL PROCEEDINGS.**

There have been no other material legal proceedings initiated since the date of our Form 10-K.  From time to time,
we may be involved in litigation incidental to the conduct of our business.  Except as otherwise disclosed in our periodic filings,
we are not currently a party to any legal proceedings that are material to our business.



**ITEM 5.   OTHER INFORMATION.**

On November 20, 2003 our Board of Directors authorized the Company to repurchase up to a total of 2,000,000
shares of our Common Stock pursuant to our stock repurchase plan.  During the December 2003 quarter the Company repurchased 528,600
shares.  As of December 31, 2003, 1,471,400 shares remain authorized and unrepurchased under the plan.

**ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K.**

(a) Exhibits:



|**Exhibit Number** | **Exhibit Description**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1                | Certificate of Incorporation of Barra, Inc. (incorporated by reference to Exhibit 3.1
of our Quarterly Report on Form 10-Q for the quarter ended June 30, 1998).                                                                                                                                                                                                                                                                                                                                                                                
|3.2                | Certificate of Designation of Rights, Preferences and Privileges of Series A
Participating Preferred Stock of Barra, Inc. (incorporated by reference to Exhibit 3.2
of our Registration Statement on Form 8-A filed with the Securities and Exchange
Commission on August 24, 2001).                                                                                                                                                                                                                                                            
|3.3                | Amended and Restated Bylaws of Barra, Inc. (incorporated by reference to Exhibit 3.3 of
our Quarterly Report on Form 10-Q for the quarter ended September 30, 2003).                                                                                                                                                                                                                                                                                                                                                                            
|4.1                | Specimen stock certificate (incorporated by reference to Exhibit 4.3 of our
Registration Statement on Form S-1 (No. 33-42951), filed with the Securities Exchange
Commission on August 20, 1991, as amended).                                                                                                                                                                                                                                                                                                                                   
|4.2                | Preferred Stock Rights Agreement, dated as of August 15, 2001, between Barra, Inc. and Mellon Investor
Services LLC, including the form of Rights Certificate and the Summary of Rights attached thereto as Exhibits B, and C, respectively
(incorporated by reference to Exhibit 4.1 of our Registration Statement on Form 8-A filed with the Securities and Exchange Commission
on August 24th, 2001).                                                                                                                                        
|4.3                | Amendment No. 1 to the Preferred Stock Rights Agreement, dated as of February 12, 2003, between
Barra, Inc. and the Mellon Investor Services LLC (incorporated by reference to Exhibit 4.2 of our Registration Statement on Form 8-A
filed with the Securities and Exchange Commission on February 14, 2003).                                                                                                                                                                                                                                   
|31.1               | Certifications of Kamal Duggirala, Chief Executive Officer of Barra, Inc., and Greg Stockett, Chief
Financial Officer of Barra, Inc., pursuant to Rule 13a-14(a) and 15d-14(a).                                                                                                                                                                                                                                                                                                                                                                 
|32.1               | Certifications of Kamal Duggirala, Chief Executive Officer of Barra, Inc., and Greg Stockett, Chief
Financial Officer of Barra, Inc., pursuant to 18 U.S.C.   1350 (this exhibit is furnished solely for the information of the
Securities Exchange Commission and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange
Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be
expressly set forth by specific reference to such filing).

(b)  Reports on Form 8-K:

On October 22, 2003, the registrant filed a Current Report on Form 8-K announcing its financial results for the
fiscal quarter ended September 30, 2003, and attaching a press release dated October 22, 2003.





**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934,
Barra has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



| |            
| | -----------
| | BARRA, Inc.

| |             
| | ------------
| | (Registrant)

Dated: February 12, 2004



| |     |                    
| | --- | -------------------
| | By: | /s/ Kamal Duggirala

| |                        
| | -----------------------
| |                        
| | Kamal Duggirala        
| | Chief Executive Officer

Dated: February 12, 2004



| |     |                  
| | --- | -----------------
| | By: | /s/ Greg Stockett

| |                         
| | ------------------------
| |                         
| | Greg Stockett           
| | Chief  Financial Officer

---

**EXHIBIT INDEX**



|**Exhibit Number** | **Exhibit Description**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1                | Certificate of Incorporation of Barra, Inc. (incorporated by reference to Exhibit 3.1
of our Quarterly Report on Form 10-Q for the quarter ended June 30, 1998).                                                                                                                                                                                                                                                                                                                                                                                
|3.2                | Certificate of Designation of Rights, Preferences and Privileges of Series A
Participating Preferred Stock of Barra, Inc. (incorporated by reference to Exhibit 3.2
of our Registration Statement on Form 8-A filed with the Securities and Exchange
Commission on August 24, 2001).                                                                                                                                                                                                                                                            
|3.3                | Amended and Restated Bylaws of Barra, Inc. (incorporated by reference to Exhibit 3.3 of
our Quarterly Report on Form 10-Q for the quarter ended September 30, 2003).                                                                                                                                                                                                                                                                                                                                                                            
|4.1                | Specimen stock certificate (incorporated by reference to Exhibit 4.3 of our
Registration Statement on Form S-1 (No. 33-42951), filed with the Securities Exchange
Commission on August 20, 1991, as amended).                                                                                                                                                                                                                                                                                                                                   
|4.2                | Preferred Stock Rights Agreement, dated as of August 15, 2001, between Barra, Inc. and Mellon Investor
Services LLC, including the form of Rights Certificate and the Summary of Rights attached thereto as Exhibits B, and C, respectively
(incorporated by reference to Exhibit 4.1 of our Registration Statement on Form 8-A filed with the Securities and Exchange Commission
on August 24th, 2001).                                                                                                                                        
|4.3                | Amendment No. 1 to the Preferred Stock Rights Agreement, dated as of February 12, 2003, between
Barra, Inc. and the Mellon Investor Services LLC (incorporated by reference to Exhibit 4.2 of our Registration Statement on Form 8-A
filed with the Securities and Exchange Commission on February 14, 2003).                                                                                                                                                                                                                                   
|31.1               | Certifications of Kamal Duggirala, Chief Executive Officer of Barra, Inc., and Greg Stockett, Chief
Financial Officer of Barra, Inc., pursuant to Rule 13a-14(a) and 15d-14(a).                                                                                                                                                                                                                                                                                                                                                                 
|32.1               | Certifications of Kamal Duggirala, Chief Executive Officer of Barra, Inc., and Greg Stockett, Chief
Financial Officer of Barra, Inc., pursuant to 18 U.S.C.   1350 (this exhibit is furnished solely for the information of the
Securities Exchange Commission and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange
Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be
expressly set forth by specific reference to such filing).

---