The Bond-Equivalent Yield Calculation Dilemma

What is the closest bond-equivalent yield to a security with a monthly yield of 0.5%?

Bond-Equivalent Yield Calculation

The bond-equivalent yield of a security is a measure used to compare the yield of a security with an annual interest rate to that of a semi-annual security. To calculate the bond-equivalent yield, we need to double the semi-annual yield. In this case, the monthly yield of the security is 0.5%, which means the semi-annual yield would be 2 * 0.5% = 1%. Now, to convert the semi-annual yield to an annual yield, we multiply it by 2. In this case, the bond-equivalent yield would be 2 * 1% = 2%. Unfortunately, none of the answer choices provided match the bond-equivalent yield of 2%. Therefore, none of the given numbers is closest to the bond-equivalent yield of the security. The bond-equivalent yield is a measure used to compare the yield of a security with an annual interest rate to that of a semi-annual security. It is calculated by doubling the semi-annual yield and then converting it to an annual yield by multiplying by 2. In this case, the monthly yield is given, and to find the bond-equivalent yield, we first need to double the monthly yield to get the semi-annual yield. Then, we multiply the semi-annual yield by 2 to get the annual yield. Unfortunately, none of the provided answer choices match the bond-equivalent yield.

More Posts: