Semi-annual basis: Difference between revisions
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imported>Doug Williamson (Note alternative punctuation.) |
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== See also == | == See also == | ||
* [[Capital market]] | |||
* [[Semi-annual rate]] | * [[Semi-annual rate]] | ||
*[[Nominal annual rate]] | *[[Nominal annual rate]] | ||
Latest revision as of 13:58, 29 October 2016
The quotation of a rate of return, or a cost, on the basis of a nominal annual rate for compounding twice per year.
Example
Q.
A rate of return - quoted as an annual effective rate - is 4.04%.
What is this same rate of return quoted on a semi-annual basis?
A.
The same rate of return quoted on a semi-annual basis is:
(1.0404(1/2) -1) x 2
= 4.00%.
It is sometimes written as semiannual, without the hyphen.
