Semi-annual basis: Difference between revisions
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imported>Doug Williamson (Align with qualifications material.) |
imported>Doug Williamson (Added a couple of See also) |
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== See also == | == See also == | ||
* [[Semi-annual rate]] | * [[Semi-annual rate]] | ||
*[[Nominal annual rate]] | |||
*[[Rate of return]] | |||
[[Category:Long_term_funding]] | [[Category:Long_term_funding]] | ||
[[Category:Cash_management]] | [[Category:Cash_management]] |
Revision as of 14:26, 1 September 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%.