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

---

**FORM 10-Q**

---

(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, 2001** 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 0-19690**

**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 of principal executive offices including zip code)

**(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 [   ],







**BARRA, INC.
                           Report On Form 10-Q For The
                           Quarter Ended December 31, 2001
                                     INDEX**



|**PART I.   Financial Information**                                                                                                              | **Page No.**
|------------------------------------------------------------------------------------------------------------------------------------------------ | ------------
|                                                                                                                                                 |             
|Item 1.   Financial Statements                                                                                                                   |             
|                                                                                                                                                 |             
|Condensed Consolidated Balance Sheets as of December 31, 2001
          
          (Unaudited) and as of March 31, 2001                          | 3           
|                                                                                                                                                 |             
|Unaudited Condensed Consolidated Statements of Income
          
          for the Three Months and Nine Months Ended December 31, 2001 and 2000 | 4           
|                                                                                                                                                 |             
|Unaudited Condensed Consolidated Statements of Cash Flows
          
          for the Nine Months Ended December 31, 2001 and 2000              | 5           
|                                                                                                                                                 |             
|Notes to Condensed Consolidated Financial Statements                                                                                             | 6           
|                                                                                                                                                 |             
|Item 2.   Management's Discussion and Analysis of Financial
                      Condition and Results of Operations                            | 13          
|                                                                                                                                                 |             
|****
Item 3.   Quantitative and Qualitative Disclosures About Market Risk                                                                        | 32          
|                                                                                                                                                 |             
|**PART II.  Other Information**                                                                                                                  |             
|                                                                                                                                                 |             
|Item 1.   Legal Proceedings                                                                                                                      | 35          
|                                                                                                                                                 |             
|Item 5: Other Information                                                                                                                        | 35          
|                                                                                                                                                 |             
|Item 6.   Exhibits and Reports on Form 8-K                                                                                                       | 35          
|                                                                                                                                                 |             
|**Signatures**                                                                                                                                   | 36          
|**Exhibit Index**                                                                                                                                | 37          

---

**PART I -- FINANCIAL INFORMATION

Item 1. Financial Statements**

---

**BARRA, INC. AND SUBSIDIARIES

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

`December 31,   March 31,
                                                         2001           2001
                                                    -------------  -------------
                                                     (Unaudited)
                            ASSETS
Current Assets:
  Cash and cash equivalents........................      $34,095        $61,837
  Investments in marketable equity trading
    securities.....................................       14,120         15,848
  Investments in marketable debt securities
    available-for-sale.............................      199,380         76,523
  Accounts receivable:
    Subscription and other (Less allowance for
     doubtful accounts of $1,437 and $518)..........      12,925         11,916
    Asset management...............................         --           11,175
    Related parties................................        6,876          6,221
  Prepaid expenses.................................        3,555          2,675
                                                    -------------  -------------
    Total current assets...........................      270,951        186,195
                                                    -------------  -------------
Investments in Unconsolidated Companies............       10,367          4,849
Premises and Equipment:
  Computer and office equipment....................       15,868         15,491
  Furniture and fixtures...........................        5,919          6,263
  Leasehold improvements...........................        7,476          8,764
                                                    -------------  -------------
    Total premises and equipment...................       29,263         30,518
Less accumulated depreciation and amortization.....      (17,535)       (16,052)
                                                    -------------  -------------
                                                          11,728         14,466
Deferred Tax Assets................................        6,480          8,153
Computer Software (less accumulated amortization
  of $2,584 and $2,082)............................        1,150          1,615
Other Assets.......................................        1,170          1,139
Goodwill and Other Intangibles (less accumulated
  amortization of $5,734 and $7,174)...............        7,642          9,995
                                                    -------------  -------------
Total..............................................     $309,488       $226,412
                                                    =============  =============

            LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Accounts payable.................................       $1,333           $850
  Accrued expenses payable:
    Accrued compensation...........................       12,008         17,018
    Accrued corporate income taxes.................       21,532         11,816
    Other accrued expenses.........................        9,490          8,602
  Unearned revenues................................       32,606         29,682
                                                    -------------  -------------
    Total current liabilities......................       76,969         67,968
                                                    -------------  -------------
Deferred Tax Liabilities...........................        5,156          2,468
Minority Interest in Equity of Subsidiary..........         --            1,249
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; 20,914,859 and 21,370,677
   shares issued and outstanding...................            2              2
  Additional paid-in capital.......................       37,675         29,340
  Retained earnings................................      189,240        125,623
  Accumulated other comprehensive income (loss)....          446           (238)
                                                    -------------  -------------
    Total stockholders' equity.....................      227,363        154,727
                                                    -------------  -------------
Total..............................................     $309,488       $226,412
                                                    =============  =============`

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

---

**BARRA INC. AND SUBSIDIARIES

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

`Three Months Ended        Nine Months Ended
                                                  December 31,              December 31,
                                           ------------------------- -------------------------
                                               2001         2000         2001         2000
                                           ------------ ------------ ------------ ------------
                                           (Unaudited)  (Unaudited)  (Unaudited)  (Unaudited)
Operating Revenues:
  Portfolio and Enterprise Risk
    Management.................                $31,013      $28,431      $90,720      $81,169
  POSIT........................                  6,010        4,579       18,082       15,362
  Other Ventures...............                  5,684        7,020       17,642       22,655
                                           ------------ ------------ ------------ ------------
    Total operating revenues...                 42,707       40,030      126,444      119,186
                                           ------------ ------------ ------------ ------------
Operating Expenses:
  Communication, data, and
    seminar costs..............                  1,922        1,740        5,527        5,359
  Compensation and benefits....                 19,458       18,805       59,386       55,896
  Occupancy....................                  1,632        1,710        4,894        5,076
  Other operating expenses.....                  5,679        6,338       17,328       18,080
  Loss on sale of Estimates
    Business...................                    --         1,064          --         1,064
                                           ------------ ------------ ------------ ------------
    Total operating expenses...                 28,691       29,657       87,135       85,475
                                           ------------ ------------ ------------ ------------
Interest Income and Other......                  2,782          886        6,911        1,916
                                           ------------ ------------ ------------ ------------
Income before Equity
  in Net Income and Loss of
  Investees, Income Taxes
  and Discontinued Operations..                 16,798       11,259       46,220       35,627

Equity in Income and Loss
  of Investees.................                    109          100          124           71
                                           ------------ ------------ ------------ ------------
Income from Continuing
  Operations before Income
  Taxes........................                 16,907       11,359       46,344       35,698

Income Taxes...................                 (5,917)      (3,908)     (16,166)     (12,280)
                                           ------------ ------------ ------------ ------------
Income from Continuing
  Operations...................                 10,990        7,451      $30,178      $23,418
                                           ------------ ------------ ------------ ------------
Discontinued Operations:

  Income from operations                           --         3,833        1,097       11,600

  Gain on sale                                     --           --        72,225          --
                                           ------------ ------------ ------------ ------------
Net Income                                     $10,990      $11,284     $103,500      $35,018
                                           ============ ============ ============ ============
Income Per Share - Continuing
  Operations:
  Basic........................                  $0.53        $0.35        $1.42        $1.13
                                           ============ ============ ============ ============
  Diluted......................                  $0.50        $0.33        $1.34        $1.05
                                           ============ ============ ============ ============

Income Per Share -
  Discontinued Operations:
  Basic........................                  $0.00        $0.18        $0.05        $0.56
                                           ============ ============ ============ ============
  Diluted......................                  $0.00        $0.17        $0.05        $0.52
                                           ============ ============ ============ ============

Gain Per Share on Sale of
  Discontinued Operations:
  Basic........................                  $0.00        $0.00        $3.40        $0.00
                                           ============ ============ ============ ============
  Diluted......................                  $0.00        $0.00        $3.20        $0.00
                                           ============ ============ ============ ============

Net Income Per Share
  Consolidated:
  Basic........................                  $0.53        $0.54        $4.87        $1.68
                                           ============ ============ ============ ============
  Diluted......................                  $0.50        $0.50        $4.59        $1.57
                                           ============ ============ ============ ============

Weighted Average Common and
  Common Equivalent Shares:
  Basic........................             20,911,131   21,000,286   21,242,829   20,809,371
                                           ============ ============ ============ ============
  Diluted......................             22,069,686   22,587,119   22,540,804   22,363,170
                                           ============ ============ ============ ============`

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

---

**BARRA, INC. AND SUBSIDIARIES

                   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**
(Amounts in thousands)

`Nine Months Ended
                                                               December 31,
                                                   ----------------------------
                                                       2001           2000
                                                   -------------  -------------
                                                    (Unaudited)    (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income .......................................     $103,500        $35,018
Adjustments to reconcile net income to net
cash provided by operating activities:
     Equity in net income of investees............         (124)           (71)
     Depreciation and amortization................        4,052          5,637
     Gains on marketable equity trading securities         (275)          (304)
     (Purchase) sale of marketable equity trading
      securities..................................        2,117         (1,652)
     Gain on sale of Symphony.....................     (117,058)         --
     Loss on sale of Global Estimates.............        --             1,064
     Deferred taxes...............................        4,361         (3,758)
     Other........................................          (47)          (482)
Changes in:
     Accounts receivable - subscription and other.       (1,009)         1,739
     Accounts receivable - related parties........       18,001         (4,414)
     Prepaid expenses.............................       (1,272)        (1,593)
     Other assets.................................          (32)          (290)
     Accrued income taxes.........................       13,424          7,134
     Accounts payable, due to related party
      and accrued expenses........................       (8,476)        (1,764)
     Unearned revenues............................        3,038          5,144
                                                   -------------  -------------
Net cash provided by continuing operations........       20,200         41,408
                                                   -------------  -------------

Net cash provided (used) by discontinued operations       4,344         (4,447)
                                                   -------------  -------------
Net cash provided by operating activities.........       24,544         36,961

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of premises and equipment, net..........       (2,191)        (1,522)
Investment in marketable debt securities -
 available for sale, net..........................     (122,173)       (40,395)
Sale of assets....................................      125,734         13,085
Investments in unconsolidated companies...........       (1,704)        (2,891)
                                                   -------------  -------------
Net cash used in investing activities                      (334)       (31,723)
                                                   -------------  -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock................        4,869          5,781
Common stock repurchased..........................      (41,152)        (4,921)
                                                   -------------  -------------
Net cash provided (used) in financing activities..      (36,283)           860
                                                   -------------  -------------
NET INCREASE (DECREASE) IN CASH AND CASH
  EQUIVALENTS                                           (12,073)         6,098
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD..       46,168         31,478
                                                   -------------  -------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD........      $34,095        $37,576
                                                   =============  =============

OTHER CASH FLOW INFORMATION:
Cash paid during the period for:
     Income taxes.................................      $40,845        $16,506

Non-Cash Investing:
     Sale of Bond Express (see Note 7)............      ($3,570)
     Preferred Stock in Valubond (see Note 7).....       $5,900`

The accompanying notes are an integral part of the BARRA, Inc. 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.  Discontinued operations represents
the results of operations from Symphony Asset Management LLC (Symphony) which was sold in July 2001. (See Note 6.) 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, 2001 and the results
of our operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United
States.  The results of operations for the interim periods are not necessarily indicative of results of operations for a full year.
The March 31, 2001 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, 2001 (Form 10-K), but does not include
all disclosures required by generally accepted accounting principles. 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 (LOSS)**

Comprehensive income includes unrealized gain on investments in marketable debt securities and foreign
currency translation gains and losses. A summary of comprehensive income follows (in thousands):

`Three Months Ended December 31,
                                           -------------------------
                                               2001         2000
                                           ------------ ------------
Net Income ..................                  $10,990      $11,284
Unrealized gain on
  investments in marketable
  debt securities available
  for sale...................                     (717)        --
Foreign currency translation
  loss ......................                     --             (4)
                                           ------------ ------------
Comprehensive income ........                  $10,273      $11,280
                                           ============ ============

                                          Nine Months Ended December 31,
                                           -------------------------
                                               2001         2000
                                           ------------ ------------
Net Income ..................                 $103,500      $35,018
Unrealized gain on
  investments in marketable
  debt securities available
  for sale...................                      684         --
Foreign currency translation
  loss ......................                     --           (494)
                                           ------------ ------------
Comprehensive income ........                 $104,184      $34,524
                                           ============ ============`

**3.      SEGMENT INFORMATION**

Our business segments are organized into different groups of products and services.  Our Core Business has one
segment: our portfolio and enterprise risk management business.  Barra Ventures is composed of investments, joint ventures or
significant licensing arrangements that leverage the ideas and intellectual property of our Core Business.  Barra Ventures has two
segments:  POSIT and Other Ventures.  POSIT is a joint venture which licenses institutional trading systems that allow institutional
investors to trade portfolios of securities directly with each other in a confidential environment.  Other Ventures includes our
subsidiary Barra RogersCasey, Inc., our strategic consulting division (Strategic Consulting) and Barra Retail Intermediaries, Inc.



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, general and administrative expenses, amortization of acquired
intangibles and interest income for the current year.  Due to the adoption of SFAS No. 142, amortization of acquired intangibles
ceased being recorded effective April 1, 2001. (See Note 5.)



For all years presented, segment expenses exclude income taxes.



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 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, 2001 and 2000, respectively (amounts in thousands):

For the three months ended December 31, 2001:

`------------- -----------------------------------------
                             BARRA CORE                  BARRA VENTURES
                            ------------- ----------------------------------------- -------------
                                              POSIT                      Total
                                Core      Joint Venture     Other       Ventures        Total
                            ------------- ------------- ------------- ------------- -------------
Portfolio and Enterprise Risk
  Management................     $31,013                                                 $31,013
POSIT........................                   $6,010                      $6,010         6,010
Other Ventures...............                                 $5,684         5,684         5,684
                            ------------- ------------- ------------- ------------- -------------
  Total revenues                  31,013         6,010         5,684        11,694        42,707

Compensation and benefits...     (14,252)         (647)       (4,558)       (5,205)      (19,457)
Other segment expenses......      (7,375)         (273)       (1,586)       (1,859)       (9,234)
Interest income and other...       2,782                                                   2,782
Equity in joint venture gains
  (losses)...................                      127           (18)          109           109
                            ------------- ------------- ------------- ------------- -------------
  Total segment expenses         (18,845)         (793)       (6,162)       (6,955)      (25,800)
                            ------------- ------------- ------------- ------------- -------------
Segment income (loss)            $12,168        $5,217         ($478)       $4,739       $16,907
                            ============= ============= ============= ============= =============
Depreciation and
  amortization                    $1,164           $40          $235          $275        $1,439`

For the three months ended December 31, 2000:

`------------- -----------------------------------------
                             BARRA CORE                  BARRA VENTURES
                            ------------- ----------------------------------------- -------------
                                              POSIT                      Total
                                Core      Joint Venture     Other       Ventures        Total
                            ------------- ------------- ------------- ------------- -------------
Portfolio and Enterprise Risk
  Management................     $28,431                                                 $28,431
POSIT........................                   $4,579                      $4,579         4,579
Other Ventures...............                                 $7,020         7,020         7,020
                            ------------- ------------- ------------- ------------- -------------
  Total revenues                  28,431         4,579         7,020        11,599        40,030

Compensation and benefits...     (13,412)         (410)       (4,983)       (5,393)      (18,805)
Other segment expenses......      (7,173)         (163)       (2,452)       (2,615)       (9,788)
Interest income and other...         886                                                     886
Equity in joint venture gains
  (losses)...................                      137           (37)          100           100
Loss on sale of Global
  Estimates business.........                                 (1,064)       (1,064)       (1,064)
                            ------------- ------------- ------------- ------------- -------------
  Total segment expenses         (19,699)         (436)       (8,536)       (8,972)      (28,671)
                            ------------- ------------- ------------- ------------- -------------
Segment income (loss)             $8,732        $4,143       ($1,516)       $2,627       $11,359
                            ============= ============= ============= ============= =============
Depreciation and
  amortization                    $1,504           $40          $455          $495        $1,999`

For the nine months ended December 31, 2001:

`------------- -----------------------------------------
                             BARRA CORE                  BARRA VENTURES
                            ------------- ----------------------------------------- -------------
                                              POSIT                      Total
                                Core      Joint Venture     Other       Ventures        Total
                            ------------- ------------- ------------- ------------- -------------
Portfolio and Enterprise Risk
  Management................     $90,720                                                 $90,720
POSIT........................                  $18,082                     $18,082        18,082
Other Ventures...............                                $17,642        17,642        17,642
                            ------------- ------------- ------------- ------------- -------------
  Total revenues                  90,720        18,082        17,642        35,724       126,444

Compensation and benefits...     (43,242)       (1,787)      (14,356)      (16,143)      (59,385)
Other segment expenses......     (22,164)         (813)       (4,773)       (5,586)      (27,750)
Interest income and other...       6,890                          21            21         6,911
Equity in joint venture gains
  (losses)...................                      178           (54)          124           124
                            ------------- ------------- ------------- ------------- -------------
  Total segment expenses         (58,516)       (2,422)      (19,162)      (21,584)      (80,100)
                            ------------- ------------- ------------- ------------- -------------
Segment income (loss)            $32,204       $15,660       ($1,520)      $14,140       $46,344
                            ============= ============= ============= ============= =============
Depreciation and
  amortization                    $3,307           $92          $653          $745        $4,052`

For the nine months ended December 31, 2000:

`------------- -----------------------------------------
                             BARRA CORE                  BARRA VENTURES
                            ------------- ----------------------------------------- -------------
                                              POSIT                      Total
                                Core      Joint Venture     Other       Ventures        Total
                            ------------- ------------- ------------- ------------- -------------
Portfolio and Enterprise Risk
  Management................     $81,169                                                 $81,169
POSIT........................                  $15,362                     $15,362        15,362
Other Ventures...............                                $22,655        22,655        22,655
                            ------------- ------------- ------------- ------------- -------------
  Total revenues                  81,169        15,362        22,655        38,017       119,186

Compensation and benefits...     (39,679)       (1,017)      (15,200)      (16,217)      (55,896)
Other segment expenses......     (20,843)         (490)       (7,182)       (7,672)      (28,515)
Interest income and other...       1,916                                                   1,916
Equity in joint venture gains
  (losses)...................                      183          (112)           71            71
Loss on sale of Global
  Estimates business.........                                 (1,064)       (1,064)       (1,064)
                            ------------- ------------- ------------- ------------- -------------
  Total segment expenses         (58,606)       (1,324)      (23,558)      (24,882)      (83,488)
                            ------------- ------------- ------------- ------------- -------------
Segment income (loss)            $22,563       $14,038         ($903)      $13,135       $35,698
                            ============= ============= ============= ============= =============
Depreciation and
  amortization                    $4,589           $80        $1,441        $1,521        $6,110`

**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**

Effective April 1, 2001, the Company adopted SFAS No. 133 - Accounting for Derivative Instruments and Hedging
Activities.  SFAS No. 133 requires the recognition of all derivatives in the balance sheet as either an asset or a liability measured
at fair value.  The statement also requires a company to recognize changes in the derivative's fair value currently in earnings
unless it meets specific hedge accounting criteria.  If the derivative is designated as a cash flow hedge, the effective portions of
changes in the fair value of the derivative are recorded in other comprehensive earnings and are recognized in the income statement
when the hedged item affects earnings.  The adoption of SFAS No. 133 did not have a significant impact on the financial position,
results of operations, or cash flows of the Company.



In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 141 - Business Combinations and SFAS
No. 142 - Goodwill and Other Intangible Assets.  SFAS No. 141 requires that all business combinations initiated after June 30, 2001
be accounted for under the purchase method and addresses the initial recognition and measurement of goodwill and other intangible
assets acquired in a business combination.  SFAS No. 142 addresses the initial recognition and measurement of intangible assets
acquired outside of a business combination and the accounting for goodwill and other intangible assets subsequent to their
acquisition.  SFAS No. 142 provides that intangible assets with finite useful lives be amortized and that goodwill and intangible
assets with indefinite lives will not be amortized, but will rather be tested at least annually for impairment.  The Company adopted
SFAS No. 142 for its fiscal year beginning April 1, 2001.  The adoption of SFAS No. 142 did not have a significant impact on the
financial position, results of operations, or cash flows of the Company.



In August 2001,  the FASB issued SFAS No. 144 - Accounting for the impairment or Disposal of Long-lived Assets,
which addresses the financial accounting and reporting for the impairment or disposal of long-lived assets (e.g. equipment and office
facilities.)  This statement supersedes SFAS No. 121 - Accounting for the Impairment of Long-lived Assets and for Long-lived Assets
to be Disposed of, and certain accounting and reporting provisions of Accounting Principles Board Opinion No. 30 - Reporting the
Results of Operations.  We adopted this statement on January 1, 2002.  We are currently evaluating the impact this statement will
have on our future financial position, results of operations, earnings per share and cash flows.

**6. SALE OF SYMPHONY ASSET MANAGEMENT**

On July 16, 2001, Barra completed the sale of its 50 percent ownership interest in Symphony to The John Nuveen
Company.  Barra received approximately $128 million in initial cash proceeds and could receive up to an additional $12 million in
future contingent consideration for its ownership interest.  An after tax gain of approximately $72 million was recorded from the
sale in the quarter ended September 30, 2001.  The operating results of Symphony have been classified as discontinued operations in
the accompanying condensed consolidated statements of income and prior periods have been reclassified on this basis.

**7. SALE OF BOND EXPRESS**

On August 31, 2001, Barra sold its subsidiary, Bond Express, Inc., to Valubond, Inc. As consideration for the sale
Barra received preferred stock representing an approximate 8% interest in Valubond, Inc.    No gain or loss was recognized upon the
sale of the business. At December 31, 2001, Barra's net investment in Valubond, Inc. amounted to approximately $4.5 million and is
included in Investments in Unconsolidated Companies on the balance sheet.

**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 year ended March 31, 2001.  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 "CAUTIONARY FACTORS THAT MAY AFFECT FUTURE
RESULTS" 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.

**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 is an investment risk management company which provides innovative 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,
2001 and 2000 (in thousands).  Revenues are distributed to geographic areas based on the country in which the Barra sales office is
located:

`2001                          2000
                          ----------------------------- -----------------------------
                                          % of Total                    % of Total
                             Revenues       Revenues       Revenues       Revenues
                          -------------- -------------- -------------- --------------
North America:
United States............       $25,639             60%       $24,040             60%
Other....................         1,088              3          1,024              3
                          -------------- -------------- -------------- --------------
Total North America......        26,727             63         25,064             63
                          ============== ============== ============== ==============

Europe:
United Kingdom...........         7,556             17          6,762             17
Germany..................         1,939              5          1,791              4
Other....................           299              1            277              1
                          -------------- -------------- -------------- --------------
Total Europe.............         9,794             23          8,830             22
                          ============== ============== ============== ==============

Asia and Australia:
Japan....................         4,840             11          4,753             12
Other....................         1,346              3          1,383              3
                          -------------- -------------- -------------- --------------
Total Asia and Australia.         6,186             14          6,136             15
                          ============== ============== ============== ==============
                          -------------- -------------- -------------- --------------
TOTAL                           $42,707            100%       $40,030            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.  Our management has implemented a hedging program designed to partially 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.



For the three month period ended December 31, 2001, when compared to the same period a year ago, the U.S. dollar
strengthened against the pound, euro and yen. This had the net effect of decreasing net revenues and net income by approximately
$1,704,000 and $1,318,000, respectively, compared to exchange rates in effect for the three month period ended December 31, 2000.



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



Cash and cash equivalents, marketable equity securities held for trading and marketable debt securities available
for sale totaled $247.6 million at December 31, 2001. In addition, we have a commitment from a bank for an unsecured short-term line
of credit of up to $25 million. No amounts have been, or are presently anticipated to be, drawn down on that line of credit.



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 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 expenditures.



Share Repurchase Plan



On October 17, 2001, our Board of Directors authorized the repurchase of up to 1,000,000 shares of our Common
Stock, pursuant to our stock repurchase plan (Repurchase Plan). Under the Repurchase Plan, we repurchased 67,500 shares on the open
market at an average price of $46.12 for an aggregate of $3,113,400 during the quarter.

**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 for the three and nine
month periods ended December 31, 2001 and December 31, 2000.



Net Income. Net income for the three month period ended December 31, 2001 was $10,990,000 or $0.50 per
share (diluted) compared to net income of $11,284,000 or $0.50 per share (diluted) for the same quarter a year ago.  Net income for
the nine month period ended December 31, 2001 was $103,500,000 or $4.59 per share (diluted) compared to net income of $35,018,000 or
$1.57 per share (diluted) for the same nine month period a year ago. Results for the nine month period ended December 31, 2001
include a gain on sale of discontinued operations, net of income taxes, of $72,225,000 or $3.20 per share (diluted).



Operating Revenues.  Total operating revenues for the three month period ended
December 31, 2001 increased $2,677,000 or 7% compared to the same period a year ago. Total operating revenues for the nine month
period ended December 31, 2001 increased $7,258,000 or 6% compared to the same period a year ago.



Portfolio and Enterprise Risk Management.  Portfolio and Enterprise Risk Management fees consist of annual
subscription fees and other related revenues for our Core Business portfolio risk management and enterprise risk management systems.
A summary of the components of this revenue is as follows (amounts in thousands):

`Three Months Ended            Nine Months Ended
                                   December 31,                  December 31,
                             ----------------------------  -----------------------------
                               2001      2000    %Change     2001      2000     %Change
                             --------- --------- --------  --------- --------- ---------
Core product subscriptions..  $29,382   $26,189       12    $86,106   $74,779        15
Implementation fees.........      779     1,656      (53)     2,176     4,479       (51)
Other Core product related..      852       586       45      2,438     1,911        28
                             --------- --------- --------  --------- --------- ---------
TOTAL....................     $31,013   $28,431        9    $90,720   $81,169        12
                             ========= ========= ========  ========= ========= =========`

Core Product Subscriptions are revenues for our portfolio risk management and enterprise risk management
products, including related updates.  We generally bill and collect fees on an annual basis, but recognize the income
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.  Excluding the negative impact of changes in foreign currency translation rates
subscription revenues increased 16% compared to the same quarter last year.



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 both the
completion of one large project in a previous quarter as well as general weakness in the demand for such services amidst spending
constraints at some of our client installations.  We expect implementation service fee revenue to continue to show decreases year
over year for at least the next quarter.



Other Core Product Related revenues include seminar revenues and other recurring and one-time fees. These
increases in revenue  are due primarily to increased revenue from royalty agreements related to the use of data provided by Barra.



POSIT.  POSIT revenues increased $1,431,000 or 31% compared to the same
quarter a year ago and increased $2,720,000 or 18% compared to the same nine month period a year ago. Our revenues from POSIT come
from royalties based on commissions generated by the trading volume in the various POSIT systems.



Other Ventures.  As a group, in the current quarter Other Ventures revenues decreased $1,336,000 or 19% and
decreased $5,013,000 or 22% over the same nine month period a year ago. The decrease principally reflects the effects of having sold
certain venture businesses (Global Estimates and Bond Express) in prior periods.  Excluding revenues from these discontinued venture
businesses, revenues for Other Ventures for the three and nine month periods ended December 31, 2000 were $5,624,000 and 17,341,000,
respectively.



Operating Expenses. For the quarter ended December 31, 2001 compared to the same quarter a year ago total
operating expenses decreased $966,000 or 3%. For the nine month period ended December 31, 2001 compared to the same period last year
total operating expenses increased $1,660,000 or 2%.



Communication, data and seminar costs consists of computer access and communication charges, software and
data costs, computer leasing and seminar expenses. This component of expense increased $182,000 or 10% compared to the same quarter a
year ago and increased $168,000 or 3% compared to the same nine month period a year ago.  The increases reflect the cost associated
with  entering into additional contracts to purchase data from outside vendors, offset by lower seminar costs resulting from fewer
events being held in the current year as compared to last year.



Compensation and Benefitsincreased $653,000 or 3% compared to the same quarter a year ago and
increased 3,490,000 or 6% compared to the same nine month period a year ago. The increases from the same quarter a year ago are
primarily the result of annual wage increases which are effective each July.



Occupancy Expense decreased $78,000 or 5% compared to the same quarter a year ago and decreased $182,000 or
4% compared to the same nine month period a year ago. These decreases are the result of additional sublease income from leasing more
of our excess facilities, as well as the positive impact from savings related to office closures conducted during the first half of
fiscal 2001.  These decreases were partially offset by higher rental costs for our Japan facilities associated with new and expanded
office space in Tokyo.



Other Operating Expensesdecreased $659,000 or 10% compared to the same quarter a year ago and
decreased $752,000 or 4% compared to 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, foreign currency
translation gains and losses, and other corporate expenses. These decreases reflect the fact that we ceased recording the
amortization of goodwill related to the sold Estimates and Bond Express businesses in the current year. We ceased amortization of our
remaining goodwill upon the adoption of SFAS No. 142 at the beginning of the current fiscal year. (See Note 5.)  Additionally,
advertising and marketing costs were lower reflecting the completion of a major branding campaign in fiscal 2001.



Interest Income and Other increased $1,896,000 or 214% compared to the same quarter a year ago and
increased $4,995,000 or 261% compared to the same nine month period a year ago. The increase is due primarily to increased interest
income earned on cash and securities balances arising from significantly higher cash and securities balances.



Equity in Net Income (Loss) of Investees represents net gains and (losses) from our equity investments in
Risk Reporting Limited and Australian POSIT.



Income from Discontinued Operations represents the results of operations
from our Symphony venture. (See Note 6.)



Gain on sale of discontinued operations, net of income taxes, represents the gain recorded upon the sale of
Symphony in July 2001. The gross gain was approximately $117 million with a related income tax liability of approximately $45
million. (See Note 6.)



CAUTIONARY FACTORS THAT MAY AFFECT FUTURE RESULTS

Our disclosure and analysis in this Form 10-Q contain several forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934,
as amended.  Forward-looking statements give our current expectations or forecasts of future events.  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", "opinion", "project", "intend",
"plan", "believe", "designed", "future", "forecast", "perceive",
"vary", "possible", "potential", "target", "will", "may",
"scheduled", "would", "could", "should", "forward", "assure" and other
words and terms of similar meaning in connection with any discussion of future operating or financial performance.  In particular,
these include statements relating to future actions, events or results.  From time to time we may also provide oral or written
forward-looking statements in other materials that we release to the public.



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 mentioned in this Form 10-Q will be important in determining future
results.  Consequently, no forward looking statement can be guaranteed.  Actual future results may vary materially.



All forward looking statements made in this report are made as of the date hereof and based on information
available to us on that date.  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 further disclosures we make on related
subjects in our Form 10-Q, 8-K and 10-K filings with the SEC.



We list below various important factors that could cause actual results to differ materially from expected and
historic results. The cautionary statements made below should be read as being applicable to all related forward looking statements
wherever they appear in this report.  Other factors besides those listed below could also adversely affect us or our business.  You
should understand that it is not possible to predict or identify all such factors.  Consequently, you should not consider any such
list to be a complete set of all potential risks or uncertainties.

**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 our ability to recognize revenue in each quarter in accordance with our revenue recognition
policies.  We derive revenue from our Core Business primarily through annual subscriptions that automatically renew unless canceled.
Annual subscription fees are recorded as revenues over each subscription period at the rate of 1/12th per month.  Consequently, sales
of subscriptions in any one month impact reported revenues evenly over the next twelve months. For this reason, our Core Business
subscription revenues are not normally subject to significant variability during a year.  Clients have historically renewed their
contracts at a high rate, but there is no assurance that these renewals will continue.

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.  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 discretionary
bonuses could have a material effect on the net income of our Core Business.

- Ventures Businesses - Diverse factors cause variability of operating results in our various Ventures
Businesses:

- POSIT -- The several POSIT systems can experience and have experienced significant fluctuations in trading
volume.  Since approximately 9% of our operating revenue and a significant portion of our income by segment came from this venture in
2001, these fluctuations can have a significant impact on our revenue and operating income.

- Other Ventures -

- Barra RogersCasey, Inc. (BRC) and Strategic Consulting - Revenues for BRC and Strategic Consulting come
primarily from retainer fee relationships. These retainer revenues are recognized ratably over each month and are subject to many of
the factors described above for the Core Business.  BRC and Strategic Consulting project revenues in any quarter depend substantially
upon total contracting activity and the ability to recognize revenue in that quarter in accordance with our revenue recognition
policies.  These revenues can be susceptible to a large degree of variability depending on the ability to source new projects and the
unpredictable nature and significance of fees associated with specific transactions. Like the Core Business, BRC and Strategic
Consulting earnings can be affected in our second fiscal quarter due to annual salary adjustments for our employees in July and
significant reliance on discretionary bonuses.

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 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.

Dependence on Availability of Data

We currently obtain data from over 100 third-party vendors for use in our products and services.  Any
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 the third-party data vendors change their product 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 this quarter, 40% 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.

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

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);

- failure to consummate a transaction; and

- customer dissatisfaction with, or problems caused by, the performance of any acquired
technologies.

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 the non-competition undertakings requested by a buyer;
and

- 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.

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 currently hold no utility patents, but have one utility patent pending.  We rely primarily on a combination of trade
secret, 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 or trademark 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 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, including those obtained in recent acquisitions, do not infringe the
intellectual property rights of third parties.  There can be no assurance, however, that the intellectual property which we have
acquired will meet the warranties negotiated in these transactions or that third parties will not otherwise assert infringement
claims in the future.  These assertions 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 - We currently hold no utility patents, but have one utility patent pending. We are also considering
applying for other utility and design patents on certain of our proprietary technologies.  Patent applications can be extremely
costly to process and defend and we cannot assure that any of the rights granted under any patent that we may 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.  We may also be called upon
to defend a joint venture partner, customer, vendor or licensee against such third party claims.  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 on terms that are commercially acceptable to us, if at all.  [(See Legal Proceedings in Item 3 of Part I of our
Form 10-K for the year ended March 31, 2001 for a discussion of certain patent issues.)]

- 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 data vendors or others. There can be no assurance that these licenses will be made available on terms
acceptable to us, if at all.

- 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 recent explosion of business method patents in these industries will only make trade secret and copyright protection less
significant over time.  Consequently, our competitors may independently develop and patent technologies that are substantially
equivalent to or superior to our technology.  To protect the proprietary assets of our Core Business, we are exploring patents for
certain of our products and we 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; and

- Most of the software in our products is dependent upon (and of little utility without) continuing access to
the historical and current data in our proprietary databases.

- Confidentiality Undertakings - Our license agreements restrict clients' disclosure of proprietary
information contained in our products.  Our joint venture and development agreements 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 knowledge bases 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 Business and Ventures Business operate has become increasingly
competitive in recent years.  These markets may become more competitive in the future as a result of the activities of existing
competitors and the entrance of new competitors into our markets.  In some of these markets, our competitors have substantially
greater name recognition, installed bases, or financial, research, development and other resources.  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 Product Model

It is intended that future Barra products will make use of a web browser as the user interface in place of
traditional desktop access through networked personal computers.  Web browser access 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.

Volatility of Stock Price; Risk of Litigation

The trading price of Barra common stock has in past and may in the future be subject to significant
fluctuations in response to factors such as:

- revenue 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;

- new product 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 in recent months 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 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.

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, operating results or financial
condition.

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.  None of our executive officers has entered into a long-term employment agreement with
Barra.

Management of Growth and Changes in Staffing

In the past few years, we have experienced an extended period of revenue growth, growth into new foreign
markets, expansion of our Core Business, 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 recent 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 license and consulting agreements have provisions designed to limit our exposure to potential liability
claims brought by our clients or other third parties.  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
investment decision-making creates the risk that clients, or the parties whose funds are managed by our clients, may pursue a claim
against us.  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.

Government Regulation

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.

- Advisers Act - We believe and have adopted the position that our Core Business products
do not provide investment advice for purposes of the Advisers Act.  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 SEC and to
adopt the strict compliance procedures mandated by the Advisers Act for a much broader segment of our business.  These changes could
also trigger obligations to comply with investment advisory regulations in foreign jurisdictions where we market our products.  These
heightened obligations would entail significant 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 might
be materially increased.  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 -- Certain of the securities exchanges have actively sought to have more stringent regulatory
requirements imposed on ATSs.  There can be no assurance that the SEC or Congress will not in the future seek to impose more
stringent regulatory requirements on the operation of ATSs such as POSIT.  If POSIT were to become subject to regulation as a stock
exchange, it is possible that they could not operate effectively.

- Soft Dollars - For several years the investment community has debated the purchase of goods and services
with soft dollars, and the practice is regulated in the U.S. by the SEC and the DOL.  Legal or regulatory changes may restrict or
prohibit us from providing services to money managers in exchange for soft dollars.  Such changes could have a material adverse
effect on our business, financial condition, or 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 planned and unplanned power losses, telecommunications failures,
unauthorized intrusions, acts of war, terrorist acts and other catastrophic events.  There is no assurance that the measures we've
taken to reduce the risk of interruption in our operations caused by these events are sufficient.

Barra's primary U.S sales office is located in the Financial District of New York City.  Its operations were interrupted for
several days by the events of September 11, 2001.  In addition, during the days immediately following September 11, 2001, POSIT
ceased trading for several days.  Finally, Barra has significant operations in the state of California and is dependent on a
continuous power supply.  Over the last year California has recently implemented, and may in the future continue to implement,
rolling blackouts throughout the state.  Any interruption in Barra's ability to continue operations at its California facilities
could delay the development of Barra's products and disrupt communications with its customers or other third parties on whom Barra
relies, such as data providers.  Future interruptions could damage Barra's reputation and could result in lost revenue.

Changes in General Economic Conditions

The U.S. and certain other economies may be experiencing slower growth after an extended period of growth in
recent years.  As a result, assets under management have decreased, thereby decreasing the revenues to asset managers.  Such reduced
asset management revenues could place pressure on our clients to cut their cost of services, which in turn could adversely impact our
sales and renewal rates.

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, 2001, there were outstanding
exercisable options to purchase approximately 3,494,000 shares of Barra common stock issued under various Barra stock option plans.
As of that date, options to purchase about 3,419,000 shares of Barra Common Stock had exercise prices below our closing common stock
price on December 31, 2001 ($47.09).

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.  Among other things, our board of directors has adopted a stockholders rights plan, commonly
referred to as a "poison pill."  If triggered, the poison pill would significantly dilute a stockholder's equity stake in Barra
if it attempted to acquire Barra without the approval of the board of directors.  In addition, certain provisions of Delaware
corporate law limit business combinations with 15% or greater stockholders that have not been approved by the board of directors.
These and other provisions could make it more difficult for a third party to buy, or could discourage a third party from buying, a
majority of our outstanding stock.

Impact of Legal and Regulatory Proceedings

Throughout this report we have made various disclosures regarding the possibility of certain legal and
regulatory proceedings. 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, would likely 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. We do not use derivative financial
instruments in our investment portfolio.



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 $41.3 million at December 31, 2001
with an average interest rate of 2.0%. At December 31, 2001, the portfolio also had approximately $192.1 million of short-term, high
credit quality municipal and corporate debt securities with an average taxable equivalent interest rate of 4.3%. The significant
increase in the balance of this segment of the portfolio resulted from the consideration received from the sale of Symphony.  The
short-term money market funds and the municipal and corporate debt securities 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 $14.1 million at December 31, 2001 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. At December 31, 2001, we had one contract to sell 500 million yen at 131, maturing on February 4, 2002, with an
unrealized gain of $19,000. Also at December 31, 2001, we had one contract to sell 5 million euro at 0.8766, maturing on February 4,
2002, with an unrealized loss of $74,000. Additionally, at December 31, 2001, we had one contract to sell 5 million pounds at 1.4407,
maturing on February 4, 2002, with an unrealized loss of $76,000.   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.

**PART II -- OTHER INFORMATION**

**ITEM 1.   LEGAL PROCEEDINGS.**

All information that is required by this item was reported under the heading "Legal Proceedings" in our March 31, 2001
Form 10-K.  There have been no other material developments in our legal proceedings 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.**

Promissory Note



On October 25, 2001, we made a loan in the amount of $250,000 to Robert Honeycutt, our Chief Operating
Officer.  The loan is secured by certain real property owned by Mr. Honeycutt.  The loan is interest-free and is due and payable by
Mr. Honeycutt in four equal annual installments of $62,500 each beginning October 31, 2002.

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

(a) The following exhibits are required by Item 601 of Regulation S-K:



|**Exhibit Number** | **Exhibit Description**                                               
|------------------ | ----------------------------------------------------------------------
|10.25              | Secured Promissory Note of Robert L. Honeycutt dated January 30, 2002.

(b)  Reports on Form 8-K:

None.





**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 13, 2002



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

| |                                      
| | -------------------------------------
| |                                      
| | Kamal Duggirala                      
| | President and Chief Executive Officer

Dated: February 13, 2002



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

| |                         
| | ------------------------
| |                         
| | Greg V. Stockett        
| | Chief  Financial Officer

---

**EXHIBIT INDEX**



|**Exhibit Number** | **Exhibit Description**                                               
|------------------ | ----------------------------------------------------------------------
|10.25              | Secured Promissory Note of Robert L. Honeycutt dated January 30, 2002.