contestada

Stanley Hart invested in a municipal bond that promised an annual yield of 6.7 percent. The bond pays coupons twice a year. What is the effective annual yield (EAY) on this investment? (Round percentage to two decimal places.) 13.4% 6.81% 6.70% None of the above

Respuesta :

Answer:

the effective annual yield (EAY) on this investment is 6.81%

Explanation:

The computation of the effective annual yield is shown below:

= (1 + rate of interest ÷ number of compounding period)^number of compounding period - 1

= (1 + 0.067 ÷ 2) ^2 - 1

= 6.81%

Hence, the effective annual yield (EAY) on this investment is 6.81%

We simply applied the above formula so that the correct value could come

And, the same is to be considered

Otras preguntas