Semi-annual basis: Difference between revisions
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imported>Doug Williamson (Colour change of example headers) |
imported>Doug Williamson (Note alternative punctuation.) |
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It is sometimes written as ''semiannual'', without the hyphen. | |||
Revision as of 22:44, 28 January 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.