<PAGE>

                                    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 SEPTEMBER 30, 1997

                                          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)


         California                                  94-2993326
(State or other jurisdiction of                  (I.R.S. Employer
incorporation or organization)                   Identification No.)


                                  2100 Milvia Street
                           Berkeley, California 94704-1113
            (Address, including zip code, of principal executive offices)
                                           
                                           
                                    (510) 548-5442
                 (Registrant's telephone number, including area code)
                                           

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

     The number of shares of the registrant's Common Stock outstanding as of 
September 30, 1997 was 13,439,706.

     Exhibit Index is located on page 21.
<PAGE>

                                        INDEX
                                           

                                                                          PAGE
PART I  FINANCIAL INFORMATION                                            NUMBER

Item 1  Financial Statements:                                               3

        Consolidated Balance Sheets as of September 30, 1997 (unaudited)
        and as of March 31, 1997                                            3
        
        Unaudited Consolidated Statements of Operations for the Three and
        Six Months Ended September 30, 1997 and September 30, 1996          4
        
        Unaudited Consolidated Statements of Cash Flows for the Six
        Months Ended September 30, 1997 and September 30, 1996              5
        
        Notes to Consolidated Financial Statements                          6

Item 2  Management's Discussion and Analysis of Financial Condition
        and Results of Operations                                           9


                                                                           PAGE
PART II OTHER INFORMATION                                                 NUMBER

Item 1  Legal Proceedings                                                  18

Item 4  Submission of Matters to a Vote of Security Holders                18

Item 5  Other Information                                                  18

Item 6  Exhibits and Reports on Form 8-K                                   18

        Signatures                                                         20

        Exhibit Index                                                      21

                                       2
<PAGE>

Part I
Item 1.  Financial Statements.


BARRA Inc. and Subsidiaries
Consolidated Balance Sheets
As of September 30, 1997 (Unaudited) and March 31, 1997
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            September 30       March 31
                                                                                                1997             1997
                                                                                           -------------------------------
                                                                                             (Unaudited)
<S>                                                                                          <C>               <C>
ASSETS
Current Assets:
Cash and cash equivalents                                                                    $12,371,517       $25,831,118
Accounts receivable:
    Trade (Less allowance for doubtful accounts of $128,022 and $135,732)                     20,900,184        15,522,575
    Related parties                                                                            2,860,089         3,017,164
Short-term investments                                                                         6,842,410         5,421,841
Note Receivable                                                                                3,444,168         5,419,474
Investments in municipal debt securities - available for sale                                 17,590,713        10,323,459
Prepaid expenses                                                                                 958,692           400,187
--------------------------------------------------------------------------------------------------------------------------
    Total current assets                                                                      64,967,773        65,935,818
--------------------------------------------------------------------------------------------------------------------------

Investments in Unconsolidated Companies                                                        2,199,203           445,644
Furniture and Equipment:
    Computer and office equipment                                                             15,431,645        12,421,668
    Furniture and fixtures                                                                     4,467,548         3,028,968
    Leasehold improvements                                                                     6,259,654         2,549,737
--------------------------------------------------------------------------------------------------------------------------
      Total furniture and equipment                                                           26,158,847        18,000,373
    Less accumulated depreciation and amortization                                           (12,267,113)       (9,739,519)
--------------------------------------------------------------------------------------------------------------------------
                                                                                              13,891,734         8,260,854
Deferred Tax Assets                                                                            1,303,947         1,038,374
Computer Software
     (Less accumulated amortization of $732,350 and $548,263)                                  1,683,126           536,442
Other Assets                                                                                   2,002,753         1,219,350
Goodwill
     (Less accumulated amortization of $2,220,787and $1,585,124)                              11,279,602         6,764,619
--------------------------------------------------------------------------------------------------------------------------
TOTAL                                                                                        $97,328,138       $84,201,101
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable                                                                              $1,628,027        $2,748,572
Due to related party                                                                           1,366,004           707,266
Accrued expenses payable:
    Accrued compensation                                                                       6,873,338         7,186,875
    Accrued corporate income taxes                                                             3,227,345         3,533,677
    Other accrued expenses                                                                     5,301,709         5,761,211
Shareholder notes payable                                                                              0           239,611
Unearned revenues                                                                             19,826,115        12,427,274
--------------------------------------------------------------------------------------------------------------------------
    Total current liabilities                                                                 38,222,538        32,604,486
--------------------------------------------------------------------------------------------------------------------------
Other Long-Term Liabilities:
Deferred tax liabilities                                                                         426,136           768,352
Shareholder notes payable                                                                              0           473,411
--------------------------------------------------------------------------------------------------------------------------
    Total other long-term liabilities                                                            426,136         1,241,763
--------------------------------------------------------------------------------------------------------------------------

Minority Interest in Equity of Subsidiary                                                      2,116,211         1,981,002
Shareholders' Equity:
Preferred stock, no par; 10,000,000 shares authorized; none issued and outstanding
Common stock, no par; 40,000,000 shares authorized;  13,439,706 shares and
    12,625,971 shares issued and outstanding                                                  23,560,376        12,878,186
Retained earnings                                                                             33,378,500        35,967,057
Foreign currency translation adjustment                                                         (375,623)         (471,393)
--------------------------------------------------------------------------------------------------------------------------
    Total shareholders' equity                                                                56,563,253        48,373,850
--------------------------------------------------------------------------------------------------------------------------
TOTAL                                                                                        $97,328,138       $84,201,101
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
</TABLE>

        See Accompanying Notes to the Consolidated Financial Statements

                                       3
<PAGE>

BARRA Inc. and Subsidiaries
Consolidated Statements of Operations
For the Three and Six Month Periods Ended September 30, 1997 and 1996
(Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                       Three Months Ended September 30,  Six Months Ended September 30,
                                                       -------------------------------   ------------------------------
                                                              1997           1996             1997          1996
                                                       -------------------------------   ------------------------------
<S>                                                       <C>            <C>              <C>            <C>
Operating Revenues:
    Subscription and consulting fees                      $23,306,592    $18,327,292      $44,047,718    $36,333,031
    Electronic brokerage                                    2,752,668      2,572,007        5,710,771      4,706,487
    Asset management                                        5,174,933      3,574,541        8,582,166      6,361,071
                                                       -------------------------------   ------------------------------
      Total operating revenues                             31,234,193     24,473,840       58,340,655     47,400,589
                                                       -------------------------------   ------------------------------
Operating Expenses:                                                                     
    Cost of subscription products                           1,505,545      1,669,055        3,213,089      3,559,844
    Compensation and benefits                              15,192,724     12,400,650       28,151,224     24,106,492
    Rent expense                                            1,418,554        980,624        2,550,182      1,969,238
    Other operating expenses                                6,160,866      4,632,146       10,921,310      8,878,063
    One-time acquisition charges                                           1,756,189        9,914,000      1,756,189
                                                       -------------------------------   ------------------------------
      Total operating expenses                             24,277,689     21,438,664       54,749,805     40,269,826
                                                       -------------------------------   ------------------------------
Interest Income & Other                                       616,369        324,021        1,071,439        965,365
                                                       -------------------------------   ------------------------------
Income before Equity in Net Income and Loss of                                          
    Investees, Minority Interest and Income Taxes           7,572,873      3,359,197        4,662,289      8,096,128
                                                                                        
Equity in Net Income and Loss of Investees                    (45,806)      (103,009)         (24,118)      (109,117)
                                                                                        
Minority Interest                                          (1,193,531)       127,321       (1,782,768)       178,543
                                                       -------------------------------   ------------------------------
Income before Income Taxes                                  6,333,536      3,383,509        2,855,403      8,165,554
                                                                                        
Income Taxes                                               (2,660,085)    (1,447,251)      (5,443,959)    (3,461,094)
                                                       -------------------------------   ------------------------------
Net Income (Loss)                                          $3,673,451     $1,936,258      ($2,588,556)    $4,704,460
                                                       -------------------------------   ------------------------------
                                                       -------------------------------   ------------------------------
Net Income (Loss) Per Share:                                    $0.25          $0.14           ($0.20)         $0.34
                                                       -------------------------------   ------------------------------
                                                       -------------------------------   ------------------------------
Weighted Average Common and Common Equivalent                                           
Shares:                                                    14,406,827     13,839,467       13,055,971     13,930,154
                                                       -------------------------------   ------------------------------
                                                       -------------------------------   ------------------------------
</TABLE>

             See Accompanying Notes to the Consolidated Financial Statements
                                       4
<PAGE>

BARRA, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
For the Six Months Ended September 30, 1997 and 1996
(Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                   Six  Months Ended
                                                                                     September 30,
                                                                              --------------------------
                                                                                   1997         1996
                                                                              --------------------------
<S>                                                                           <C>             <C>
Cash Flows from Operating Activities:
Net Income (loss)                                                             ($2,588,556)    $4,704,460
Adjustments to reconcile net income (loss) to net cash provided
by operating activities:
    Equity in net income and loss of investees                                     24,118        109,117
    Minority interest                                                           1,782,768       (178,543)
    Depreciation and amortization                                               2,044,082      1,660,822
    Dividends received from investee                                                            (226,583)
    Gains on marketable securities                                               (150,000)       (86,000)
    One-time acquisition charges                                                9,914,000        448,426
    Other                                                                        (305,513)       275,338
Changes in:
    Trade accounts receivable                                                  (6,818,060)    (2,441,588)
    Related parties receivable                                                  3,147,098        (39,700)
    Prepaid expenses                                                             (474,956)       194,913
    Other assets                                                                 (911,909)       178,394
    Accounts payable, due to related party and accrued expenses                (5,167,558)       (98,053)
    Unearned revenues                                                           3,761,985      2,054,486
--------------------------------------------------------------------------------------------------------
Net cash provided by operating activities                                       4,257,499      6,555,489
--------------------------------------------------------------------------------------------------------

Cash Flows from Investing Activities:
Capital expenditures                                                           (5,657,498)    (2,131,370)
Short-term investments - net                                                   (1,270,569)       (59,353)
Investment in municipal debt securities - available for sale                   (7,267,254)    (6,350,000)
Acquisition of GAT and Innosearch, net of cash acquired                        (1,713,529)
Investments in unconsolidated companies                                        (1,803,559)      (875,000)
Repayments on note receivable                                                   2,105,836
Dividends received from investee                                                                 226,583
Consolidation of Bond Express L.P. - cash acquired                                               146,742
--------------------------------------------------------------------------------------------------------
Net cash used in investing activities                                         (15,606,573)    (9,042,398)
--------------------------------------------------------------------------------------------------------

Cash Flows from Financing Activities:
Payments to minority shareholders                                              (2,213,828)
Repayments on notes payable and lines of credit                                  (713,022)    (2,523,285)
Proceeds from notes payable and lines of credit                                                  445,140
Proceeds from sale of common stock                                                816,323        263,526
Common stock repurchased                                                                        (601,973)
--------------------------------------------------------------------------------------------------------
Net cash used in financing activities                                          (2,110,527)    (2,416,592)
--------------------------------------------------------------------------------------------------------

Net Decrease in Cash and Cash Equivalents                                     (13,459,601)    (4,903,501)
Cash and Cash Equivalents at Beginning of Period                               25,831,118     22,493,363
--------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Period                                    $12,371,517    $17,589,862
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------

Other Cash Flow Information:
Cash paid during the period for:
    Interest expense                                                              $29,264         $3,063
    Income taxes                                                               $3,878,925     $2,938,615
Non-cash investing transactions during the period for:
    Acquistion of GAT and Innosearch - See note 2
    Exchange of equity interest in LBIC for debt                                              $7,219,458
    Consolidation of Bond Express L.P.:
       Note receivable                                                                       ($2,100,000)
       Net assets acquired                                                                    $1,139,726
       Minority Interest                                                                        $512,877
       Goodwill                                                                               $1,473,151
</TABLE>

         See Accompanying Notes to the Consolidated Financial Statements
                                       5

<PAGE>

                             BARRA, INC. AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  BASIS OF PRESENTATION

The accompanying consolidated financial statements include the accounts of
BARRA, Inc. (the "Company" or "BARRA") and its wholly-owned subsidiaries.  Also
included in the accompanying consolidated financial statements are the accounts
of 1) Bond Express, L.P., in which the Company determined it had controlling
financial interest beginning June 1, 1996; 2) Symphony Asset Management, LLC
(Symphony LLC"), a 50%-owned joint venture; and 3) Global Advanced Technology
Corporation ("GAT") and approximately 62% of Innosearch Corporation
("Innosearch")  which the Company acquired on June 24, 1997 (see Note 2). All
significant intercompany transactions and balances have been eliminated. 
Certain reclassifications have been made to prior year financial statements to
conform to current year presentation.

In the opinion of management, the accompanying unaudited consolidated financial
statements include all adjustments (consisting of normal recurring entries)
necessary to present fairly the financial position of BARRA as of September 30,
1997 and the results of its operations and cash flows for the periods presented
in conformity with generally accepted accounting principles.  The results of
operations for the interim periods are not necessarily indicative of results of
operations for a full year.  The March 31, 1997 consolidated balance sheet is
derived from the audited consolidated financial statements included in BARRA's
Annual Report on Form 10-K for the fiscal year ended March 31, 1997, filed with
the Securities and Exchange Commission on June 24, 1997 (the "Form 10-K"), but
does not include all disclosures required by generally accepted accounting
principles. It is suggested that these 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.  BUSINESS COMBINATION

On June 24, 1997 the Company completed the acquisition of GAT and a majority
ownership interest in Innosearch, an affiliate of GAT. GAT is a leading provider
of fixed income analytics and related consulting services. The total purchase
price of approximately $20 million included 704,589 shares of unregistered BARRA
common stock valued at approximately $10 million, liabilities assumed of
approximately $6 million, and

                                       6
<PAGE>

cash and transaction costs of approximately $4 million.  Under terms of the 
acquisition, an additional $1 million of contingent consideration is payable 
if certain conditions are met within specified time frames. The acquisition 
has been accounted for as a purchase, and the results of GAT and Innosearch 
are included in the accompanying consolidated financial statements from the 
date of acquisition only.

The cost of the acquisition has been allocated on the basis of the estimated
fair value of assets acquired and liabilities assumed.  This allocation resulted
in capitalized software of approximately $1 million, purchased in-process
technology of approximately $10 million and goodwill of approximately $5
million. As required under generally accepted accounting principles, the amount
allocated to purchased in-process technology was immediately expensed. Goodwill
from the acquisition will be amortized over 10 years.  

The following summary, prepared on a pro-forma basis, combines the unaudited 
consolidated results of operations as if GAT and Innosearch had been acquired 
as of the beginning of the periods presented, after excluding the impact of 
one-time acquisition charges:

                             THREE MONTHS ENDED SEPTEMBER 30,
                             --------------------------------
                                  1997            1996
                                  ----            ----
    Operating revenues          $31,234,193    $26,446,990
    Net income                  $ 3,673,451    $ 1,750,180
    Net income per share          $.25            $.12

                             SIX MONTHS ENDED SEPTEMBER 30,
                             ------------------------------
                                  1997            1996
                                  ----            ----
    Operating revenues         $60,168,655     $51,378,984
    Net income                 $ 7,127,540     $ 4,633,432
    Net income per share           $.51           $.32

The pro-forma financial information is presented for informational purposes only
and is not necessarily indicative of the operating results that would have
occurred had GAT and Innosearch been acquired as of the above dates.  In
addition, the pro-forma results are not intended to be a projection of future
results and do not necessarily reflect the financial impact of combining GAT and
BARRA's operations.

                                       7
<PAGE>

3.  NET INCOME (LOSS) PER SHARE

On August 23, 1997, the company's Board of Directors authorized a 3-for-2 stock
split payable on October 13, 1997 to stockholders of record on September 22,
1997.  All references in these financial statements to average number of shares
outstanding and per share amounts have been restated to reflect the split.
 
Net income per share is computed using the primary weighted average number of
common shares outstanding during the period after including the effect of
dilution, if any, of the exercise of common stock options using the treasury
stock method. Net loss is computed using only the primary weighted-average
number of common shares outstanding during the period.  Fully diluted income
(loss) per share is not significantly different than primary income (loss) per
share.


4. SUBSEQUENT EVENT - ACQUISITION OF THE ESTIMATE DIRECTORY AND DIRECTUS 

On October 9, 1997, the Company completed the acquisition of the assets of two
businesses from Edinburgh Financial Publishing Limited ("EFP") and two of EFP's
affiliates, for up to 7.25 million pounds (approximately US$12,000,000 as of
September 30, 1997), plus the assumption of ongoing business liabilities.  The
two businesses are The Estimate Directory ("TED"), a database of analysts'
earnings estimates, and Directus ("Directus"), a corporate directors equity
trading information service.  The acquisition will be accounted for using the
purchase method of accounting and will likely result in a one-time write-off of
in process development costs in the quarter ended December 31, 1997.

                                       8
<PAGE>

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 the 
BARRA, Inc. ("BARRA" or the "Company") unaudited financial statements and 
related notes presented in this Form 10-Q.  The discussion of results, causes 
or trends should not be construed to imply that such results, causes or 
trends will necessarily continue in the future.  Each statement made in this 
discussion and analysis and elsewhere in this report containing any future 
verb tense or form of the words "anticipate", "estimate", "expect," 
"believe," "future" or "forward" is a forward-looking statement that may 
involve a number of risk factors and uncertainties.  Among other factors that 
could cause actual results to differ materially are the following: business 
conditions and other changes in the Company's industry; competitive factors 
such as rival products and price pressures both domestically and 
internationally; availability of adequate third-party data on reasonable 
terms and at reasonable prices; significant delays or excessive costs 
associated with product research, development and/or introduction; the loss 
of a large single revenue source; the investment performance and the timing 
of performance fee determination dates for the Company's asset management 
subsidiary; significant changes in trading volumes on the POSIT trading 
system; and fluctuations in U.S. dollar exchange rates for non-U.S. 
currencies.  Further information and potential risk factors that could affect 
the Company's financial results are included in the Company's Form 10-K for 
the fiscal year ended March 31, 1997.
  
A.  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.

As discussed in Note 2 to the financial statements, on June 24, 1997, BARRA
acquired substantially all of the ownership of GAT and a majority interest in
Innosearch.  The acquisition was accounted for as a purchase and the unaudited
financial information presented here reflects the results of GAT and Innosearch
only since the date of acquisition.  The minority shareholder's interest in
Innosearch's net assets and results of operations has been included in minority
interest in the accompanying unaudited consolidated balance sheet and statement
of operations. 

                                       9
<PAGE>

As discussed in Note 4 to the financial statements, on October 9, 1997, the
Company completed the acquisition of the assets from two businesses from
Edinburgh Financial Publishing Limited ("EFP") and two of EFP's affiliates, for
up to 7.25 million pounds (approximately US$12,000,000 as of September 30,
1997), plus the assumption of ongoing business liabilities. Since the
acquisition closed subsequent to September 30, 1997, none of the purchased
assets and liabilities assumed or related revenues and expenses are reflected in
the accompanying consolidated statements of operations or financial position for
the periods ended September 30, 1997. The acquisition will be accounted for
using the purchase method of accounting and will likely result in a one-time
write-off of in-process technology costs in the quarter ended December 31, 1997.

FOREIGN CURRENCY
BARRA, as an international corporation, generates revenues from clients
throughout the world, maintains sales and representative offices world-wide and
holds certain deposits and accounts in foreign currencies.  BARRA's revenues are
generated from both United States and foreign currencies.  BARRA's subscriptions
in the United Kingdom and the European Community are priced in British pounds
sterling ("pounds") and European Currency Units ("ECUs"), respectively. 
Additionally, BARRA's consolidated subsidiary, BARRA International (Japan), Ltd.
("BARRA Japan"), generates revenues, has expenses and has assets and liabilities
in Japanese yen.  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.  The Company has considered its exposures to foreign currency
fluctuations and to this point has decided not to engage in hedging or managing
exposures to foreign currency fluctuations through contracts for the purchase,
sale or swapping of currencies.

For the quarter ended September 30, 1997, when compared to the same quarter a
year ago, the U.S. dollar strengthened against the yen, pound and ECU - all of
which had the effect of reducing net revenues by approximately $250,000 for the
period. The impact of exchange rate changes from the same quarter a year ago
decreased net income by approximately $300,000.

Because the functional currency of BARRA Japan is the yen, the translation gains
and losses associated with the consolidation of its balance sheets at points in
time are reported as part of shareholders' equity.

                                       10
<PAGE>

Under current operating arrangements in the countries in which BARRA does
business, there are no restrictions upon the flow of funds from BARRA's foreign
subsidiary to the parent company.  There are currently no commitments or
requirements for material capital expenditures outside of the United States
except for the acquisition of TED and Directus.

B.  FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
    
The dollar and percentage increases or decreases set forth below in this
discussion and analysis of BARRA's consolidated financial condition result from
a comparison of BARRA's balance sheet at September 30, 1997 to the balance sheet
at March 31, 1997.  All amounts have been rounded to the nearest $1,000.
 
FINANCIAL CONDITION
Total assets increased $13,127,000 or 15.6%.

Total current assets decreased $968,000 or 1.5%. This net decrease consists
primarily of decreased cash and equivalents as a result of investing activities
completed during the period offset by increases in trade receivables from the
acquisition of GAT and asset management activities - see the accompanying
unaudited consolidated statement of cash flows for more information.

Investments in unconsolidated companies increased $1,754,000 representing two
investments: 1) 272.7 shares of Series A Convertible Preferred Stock of Data
Downlink Corporation; and 2) an additional 46,368 shares of Series C Convertible
Preferred Stock of QuoteCom, Inc.

Furniture and equipment increased $5,658,000, excluding approximately $2,500,000
in furniture and equipment acquired as part of the acquisition of GAT and
Innosearch.  This increase reflects expenditures for leasehold improvements and
new office furniture associated with moving the Company's headquarters in June
1997 as well as further office expansions in the Company's San Francisco and
Connecticut locations.

Increases in computer software and goodwill of $1,147,000 and $4,515,000,
respectively, are primarily the result of purchase price allocations for the
acquisitions of GAT and Innosearch. 

Total current liabilities increased $5,618,000 due to approximately $3.2 million
in unearned revenue associated with GAT product subscriptions with the remaining
increase resulting from growth in BARRA product subscriptions. 

                                       11
<PAGE>

Minority interest in equity of subsidiary represents minority shareholders' 
interests in the net assets of Bond Express L.P., Symphony LLC and Innosearch.

Shareholders' equity in common stock increased $10,682,000 as a result of
issuing 704,589 common shares for the acquisition of GAT and Innosearch, as well
as the issuance of BARRA common stock for exercises of stock options under the
Company's Employee Stock Option Plan and shares purchased under the Employee
Stock Purchase Plan.

LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents, short-term investments and investment in municipal
debt securities available-for-sale totaled $36,805,000 at September 30, 1997
($24,805,000 excluding approximately $12,000,000 for the acquisition of TED and
Directus).  In addition, the Company has a commitment from a bank for an
unsecured short-term line of credit of up to $5 million - of which, no amounts
have been, or are presently anticipated to be, drawn down.

BARRA believes that its cash flow from operations (including prepaid
subscription fees), together with existing cash balances, will be sufficient to
meet its cash requirements for capital expenditures and other cash needs for
ongoing business operations including the acquisition of TED and Directus. Other
than commitments described in this discussion and analysis and in the financial
statements and notes, the Company has no present binding understandings or
commitments with respect to any significant expenditures.

PRINCIPAL FINANCIAL COMMITMENTS.  The Company's principal financial commitments
consist of obligations under the TED and Directus asset purchase agreement and
operating leases and contracts for the use of computer and office facilities.

C.  RESULTS OF OPERATIONS

References to the dollar and percentage increases or decreases set forth below
in this discussion and analysis of BARRA's results of operations are derived
from comparisons of BARRA's consolidated statements of operations for the three
and six month periods ended September 30, 1997 and September 30, 1996. Results
of operations for the three and six month periods  ended September 30, 1997
include the results of GAT and Innosearch which were acquired on June 24, 1997.
All amounts, except per share amounts, have been rounded to the nearest $1,000.

                                       12
<PAGE>

NET INCOME (LOSS)
Net income for the three month period ended September 30, 1997, was $3,673,000
or $0.25 per share, compared to net income of $1,936,000 or $0.14 per share for
the same quarter a year ago. Net income for the three month period ended
September 30, 1996 included one-time acquisition charges of $1,756,000 or $.08
per share in connection the Company's acquisition of Rogers, Casey & Associates,
Inc. ("RogersCasey") in July, 1996. 

Net loss for the six month period ended September 30, 1997 was $2,589,000 or
$.20 per share compared to net income of $4,704,000 or $.34 for the same period
a year ago.  One time acquisition charges included in net income (loss) and per
share amounts for the six month periods ended September 30, 1997 and 1996 were
$9,914,000 or $.72 per share and $1,756,000 or $.07 per share, respectively.

OPERATING REVENUES.  Total operating revenues increased $6,760,000 or 28% over
the same quarter a year ago and $10,940,066 or 23% over the same six month
period a year ago. Operating revenues from GAT and Innosearch included in the
three and six month periods ended September 30, 1997 were $2,082,000. 

SUBSCRIPTION AND CONSULTING FEES consist of annual subscription fees for BARRA's
software products, revenues from other sources related to the institutional
analytics business and consulting services to pension plan sponsors and
investment managers. A summary of the components and related changes is as
follows (amounts in 000's):

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
                                    THREE MONTHS ENDED                            SIX MONTHS ENDED
                                        SEPTEMBER 30,                               SEPTEMBER 30,


                              1997           1996       % CHANGE           1997           1996       % CHANGE
-------------------------------------------------------------------------------------------------------------
<S>                         <C>            <C>          <C>              <C>            <C>          <C>
Analytics subscriptions     17,320         12,898             34         32,175         24,603             31
Other analytics related      1,262          1,275             (1)         2,298          2,614            (12)
Consulting                   4,724          4,154             14          9,575          9,116              5
-------------------------------------------------------------------------------------------------------------
TOTAL                       23,306         18,327             27         44,048         36,333             21
-------------------------------------------------------------------------------------------------------------
</TABLE>

ANALYTICS SUBSCRIPTIONS are for BARRA's software products and related updates. 
The Company generally bills and collects fees on an annual basis, but recognizes
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, increasing revenues from existing customers through
the introduction of new products

                                       13
<PAGE>

and services and acquisitions. Analytics subscription revenue for the three 
and six month periods ended September 30, 1997 includes $1,447,000 of GAT 
product subscription revenue. For the three month period ended September 30, 
1997 compared to the same quarter a year ago, annual subscription fee revenue 
for the U.S (including GAT revenue for 1997) and non-U.S. markets increased 
approximately 58% and 21%, respectively. Excluding the impact of the new GAT 
subscription revenue, the increase was 27% for U.S. subscription revenues. 
For the six month period ended September 30, 1997 compared to the same period 
a year ago, annual subscription fee revenue  for the U.S (including GAT 
revenue for 1997) and non-U.S. markets increased approximately 42% and 23%, 
respectively, approximately 26% and 23% excluding GAT revenue. Excluding 
revenues from GAT, revenue growth primarily came from equity models and 
related data reflecting the continued success of the BARRA Aegis System-TM-.  
Various new single country and global versions of this equity analytics 
system have been introduced continuously since July 1995.  Fixed income 
product sales also contributed, primarily to the non-US increase, as a result 
of sales of the BARRA COSMOS System-TM- and the recently released COSMOS 
Optimizer feature, which was introduced in January 1997. Increases in 
subscription revenues continue to come most significantly from net increases 
in the number of subscriptions and less significantly from changes in the 
prices of subscriptions. 

REVENUES FROM OTHER SOURCES RELATED TO THE INSTITUTIONAL ANALYTICS BUSINESS 
include timesharing revenues, seminar revenues and other recurring fees. The 
decline in the relative and absolute amounts of this component of revenue 
continues to be the result of the conversion of clients from timesharing to 
in-house computers for running BARRA's products and differences in the timing 
of certain seminars.

CONSULTING FEES
Consulting fees consist of fixed income consulting provided by GAT; Services 
to pension plan sponsors ("Sponsor Services") which are usually recurring 
retainer-based fee arrangements; and consulting to money managers ("Strategic 
Services"), which are usually non-recurring, project engagements that are 
completed in phases.  Also included in Strategic Services revenues are fees 
related to consulting work done in connection with strategic transactions 
involving clients. Accordingly, Strategic Services revenues are 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 strategic transactions. Consulting fees from GAT's fixed income 
consulting unit amounted to $635,000 for the three and six month periods 
ended September 30, 1997. Excluding the impact of GAT consulting fees, 
revenues from

                                       14
<PAGE>

consulting services were slightly lower compared to the same periods a year 
ago reflecting modest growth in these businesses offset by declines in 
non-recurring strategic transaction fees and one specific BARRA custom 
product development fee. 

ELECTRONIC BROKERAGE
Electronic brokerage revenues increased $180,000 or 7% compared to the same
quarter a year ago and $1,004,000 or 21% compared to the same six month period a
year ago. This component of revenue consists principally of license fees from
Portfolio System for Institutional Trading ("POSIT"), which increased $83,000 or
4% compared to the same quarter a year ago and $619,000 or 14% compared to the
same six month period a year ago.  BARRA's revenues from POSIT are derived from
commissions generated by the trading volume in the system.  POSIT revenue
increases reflect higher trading volumes during the quarter as well as greater
usage of the system by its major participants. Revenues from Bond Express L.P.
accounted for $97,000 and $385,000 of the increase in total electronic brokerage
revenues from the same quarter and six month periods a year ago. These increases
are due in part to the inclusion of Bond Express' results of operations for only
one month in the June 30, 1996 quarter.  

ASSET MANAGEMENT
Asset management revenues increased $1,601,000 or 45% compared to the same
quarter a year ago and $2,221,000 or 23% compared to the same six month period a
year ago. Asset management revenues consist of fees generated from active
management of investor accounts by Symphony LLC and fees earned by RogersCasey
asset management services from management of customized multi-manager programs.

Symphony LLC's revenues consist primarily of asset management fees which are 
a fixed percentage of asset value and performance fees that are based on the 
performance over a benchmark for each account.  Symphony LLC's total revenues 
were $4,789,000 for the current quarter compared to $3,041,000 for the same 
quarter a year ago, and $7,787,000 for the six months ended September 30, 
1997 compared to $5,266,000 for the same period a year ago. The increase in 
total revenues for three and six month periods ended September 30, 1997 
compared to the same periods a year ago was primarily the result of increases 
in base fees due to growth in assets under management. As of September 30, 
1997, Symphony LLC had approximately $1.9 billion under direct management. Of 
the funds under direct management, approximately $1.2 billion are managed 
under agreements that provide for performance fees in addition to a base 
management fee.

                                       15
<PAGE>

Performance fees included in total revenues were $1,835,000 for the current
quarter compared to $1,366,000 for the same quarter a year ago and $2,214,000
for the six months ended September 30, 1997 compared to $2,147,000 for the same
period a year ago. Performance fees are recognized only at the measurement date
for determining performance of an account, which typically is at the end of each
year of the contract. The increase in performance fee revenues is the result of
better investment performance over the pervious twelve months as compared to the
preceding twelve month measurement periods offset in part by fewer investor
account anniversaries during the current quarter and year-to-date periods as
compared to the same periods a year ago. The pattern of anniversaries can change
from quarter to quarter because of the addition, termination and re-negotiation
of account agreements. There is also, of course, no assurance that the
investment performance will continue at historical levels. It is presently
estimated that approximately 45% and 20% of the performance based funds under
management will have performance fee determination dates in the quarters ended
December 31, 1997 and March, 31, 1998, respectively.

Symphony LLC's future revenues will depend on the performance of the funds it
manages and the timing of anniversary fee determination dates for performance
based funds.  

OPERATING EXPENSES.  Total operating expenses, including one-time acquisition
charges of $1,756,000 in the quarter ended September 30, 1996, increased
$2,839,000 or 13% compared to the same quarter a year ago.  Excluding one-time
acquisition charges, operating expenses increased $4,595,000 or 23%. For the six
month period ended September 30, 1997 compared to the same period a year ago,
total operating expenses, including one-time acquisition charges, increased
$14,479,979 or 36%.  Excluding one-time acquisition charges from both periods,
total operating expenses increased $6,322,000 or 16%.

COST OF SUBSCRIPTION PRODUCTS
Cost of subscription products consists of computer access charges, data and 
software acquisition expenses, BARRA's computer leasing expenses, and seminar 
expenses. This component of expense decreased $164,000 or 10% compared to the 
same quarter a year ago and $347,000 or 10% compared to the same six month 
period a year ago.  These decreases reflect lower seminar costs, which are 
principally a result of timing, and lower data costs as a result of certain 
non-recurring, project-related data fees included in the June, 1996 quarter. 

COMPENSATION AND BENEFITS
Compensation and benefits increased $2,792,000 or 23% compared to the same
quarter a year ago and increased $4,045,000 or 17%

                                       16
<PAGE>

compared to the same six month period a year ago. Excluding compensation and 
benefit costs from the GAT acquisition of approximately $1.4 million, the 
increases from the same quarter and six month periods a year ago are 
primarily the result of wage increases that take effect on July 1 within each 
fiscal year and a small increase in the number of employees.  Increases in 
group insurance and other benefits also contributed to higher costs. 
  
OTHER OPERATING EXPENSES
Other operating expenses increased $1,529,000 or 33% compared to the same
quarter a year ago and increased $2,043,247 or 23% compared to the same six
month period ended a year ago. Other operating expenses include travel, office,
maintenance, depreciation, amortization, data costs related to non-subscription
services, marketing, advertising, outside legal and accounting services and
other corporate expenses.  The increases from the same quarter and six month
periods a year ago reflects GAT expenses of approximately $700,000, and
increases in travel, foreign currency losses, advertising and marketing,
amortization of goodwill and leasehold improvements. These increases are
consistent with the general growth of BARRA's business and the move to a new
headquarters facility during the year.

ONE-TIME ACQUISITION CHARGES
One-time acquisition charges of $9,914,000 for the six month period ended
September 30, 1997 represent purchased in-process research and development in
connection with the acquisitions of GAT and Innosearch on June 24, 1997. As
required by generally accepted accounting principles, the portion of the
purchase price allocated to purchased technology was immediately expensed.

One-time acquisition charges of $1,756,000 for the quarter and six month period
ended September 30, 1996 related to the Company's acquisition of RogersCasey in
July, 1996.  

INTEREST INCOME AND OTHER
Interest income and other for the three and six month periods ended September
30, 1997 increased over the same periods a year ago as a result of higher
recorded gains on short-term investments, higher average invested balances and
lower interest expense from acquired subsidiaries.

MINORITY INTEREST 
Minority interest primarily represents the share of profits from Symphony LLC 
that is due to the minority shareholders.

                                       17
<PAGE>

                             PART II - OTHER INFORMATION
                                           

Each statement made in this Part II containing any future verb tense or any form
of the words "believe", "future", "forward", "estimate", "anticipate" or
"expect" is a forward looking statement that may involve a number of risk
factors and uncertainties.  A discussion of those risk factors is located in the
first paragraph of Part I, Item 2.

ITEM 1.  LEGAL PROCEEDINGS.
All information required by this item has been previously reported under the
heading "Business-Litigation" in the Form 10-K.  There have been other material
developments in the legal proceedings of BARRA since the date of the Form 10-K.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.  All information
required by this item has been previously reported under Part II, Item 4 in the
Company's June 30, 1997 Form 10-Q.  There have been no other submission of
matters to a vote of the security holders of BARRA since the date of the
June 30, 1997 Form 10-Q.

ITEM 5.  OTHER INFORMATION.
On October 9, 1997 the Company completed the acquisition of certain assets from
Edinburgh Financial Publishing Limited and its affiliates, Edinburgh Financial
Publishing (Asia), Limited and Edinburgh Financial Publishing (USA), Inc.  For
further details of these transactions see Note 4 of the Notes to Consolidated
Financial Statements and Item 2 of Part I of this form.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.
(a) the following exhibits are required by Item 601 of the Regulation S-K:

Exhibit                                                               Sequential
Number        Exhibit Description                                    Page Number
-------       -------------------                                    -----------
10.1          Asset Purchase Agreement, dated                            22
              September 8, 1996, between Edinburgh Financial
              Publishing Limited, Edinburgh Financial Publishing
              (Asia) Limited, Edinburgh Financial Publishing
              (USA), Inc., BARRA (U.K.), Ltd., BARRA, Inc.,
              Jeremy Salvesen, Angus MacDonald, BARRA
              International, Ltd. and BARRA International
              (Japan), Ltd.

(b) Reports on Form 8-K:  None.

                                       18
<PAGE>

                                      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)


Date:  November 14, 1997                    /s/ Andrew Rudd
                                  -----------------------------------------
                                  Andrew Rudd, Chairman of the Board of
                                  Directors and Chief Executive Officer 


Date:  November 14, 1997                    /s/ James D. Kirsner
                                  -----------------------------------------
                                  James D. Kirsner, Chief Financial Officer


                                       19
<PAGE>

EXHIBIT INDEX


Exhibit                                                         Sequential
Number        Exhibit Description                               Page Number
------        -------------------                               -----------
10.1          Asset Purchase Agreement, dated                        22
              September 8, 1996, between Edinburgh Financial
              Publishing Limited, Edinburgh Financial Publishing
              (Asia) Limited, Edinburgh Financial Publishing
              (USA), Inc., BARRA (U.K.), Ltd., BARRA, Inc.,
              Jeremy Salvesen, Angus MacDonald, BARRA
              International, Ltd. and BARRA International
              (Japan), Ltd.

                                       20