What is the effective semiannual return? (Do not round intermediate calculations
ID: 2660420 • Letter: W
Question
What is the effective semiannual return? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
What is the effective quarterly return? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
What is the effective monthly return? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
You are looking at an investment that has an effective annual rate of 13.9 percent.What is the effective semiannual return? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
Explanation / Answer
Effective annual interest=13.9%
Effective semi annual return=[(1.139)^0.5]-1
=6.72%
Effective quaterly return=[(1.139)^0.25]-1
=3.31%
Effective monthly return=[(1.139)^(1/12)]-1
=1.091%