Semi-annual basis: Difference between revisions
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imported>Doug Williamson (Expand to assist clarity, semi-annual not = periodic rate per 6 months.) |
imported>Doug Williamson (Add link.) |
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The quotation of a rate of return, or a cost, on the basis of a nominal annual rate for compounding twice per year. | The quotation of a rate of return, or a cost, on the basis of a nominal annual rate for compounding twice per year. | ||
A rate of return quoted as an annual effective rate is | <span style="color:#4B0082">'''Example'''</span> | ||
'''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: | The same rate of return quoted on a semi-annual basis is: | ||
(1. | (1.0404<sup>(1/2)</sup> -1) x 2 | ||
= 4.00%. | |||
It is sometimes written as ''semiannual'', without the hyphen. | |||
== See also == | == See also == | ||
* [[Capital market]] | |||
* [[Semi-annual rate]] | * [[Semi-annual rate]] | ||
*[[Nominal annual rate]] | |||
*[[Rate of return]] | |||
[[Category: | [[Category:Long_term_funding]] | ||
[[Category: | [[Category:Cash_management]] | ||
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.
