Semi-annual basis: Difference between revisions
From ACT Wiki
Jump to navigationJump to search
imported>Doug Williamson (Added a couple of See also) |
imported>Doug Williamson (Colour change of example headers) |
||
| Line 2: | Line 2: | ||
< | <span style="color:#4B0082">'''Example'''</span> | ||
'''Q.''' | '''Q.''' | ||
Revision as of 15:52, 13 November 2015
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%.
