CFA CFA General Effective Annual Yield (EAY) Calculation

Effective Annual Yield (EAY) Calculation

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    • Avatar of pranay95pranay95
        • CFA Level 1

        <div id=”question_5816259_question_text” class=”question_text user_content enhanced”>

        Assume that a bond compounds 5 times per year and has a periodic interest rate of 3.88%. What is the bond’s Effective Annual Yield (EAY), stated as a percent?

        Hint: The periodic rate is the rate for the compounding period. If the bond compounded 12 times per year, the rate given above would be a monthly rate.

        Can someone please answer this?

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