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You are looking at an investment that has an effective annual rate of 12.8 percent. a. What is...

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Finance

You are looking at an investment that has an effective annualrate of 12.8 percent.
a.What is the effective semiannual return? (Do not roundintermediate calculations and enter your answer as a percentrounded to 2 decimal places, e.g., 32.16.)
b.

What is the effective quarterly return? (Do not roundintermediate calculations and enter your answer as a percentrounded to 2 decimal places, e.g., 32.16.)

c.What is the effective monthly return? (Do not roundintermediate calculations and enter your answer as a percentrounded to 2 decimal places, e.g., 32.16.)

Answer & Explanation Solved by verified expert
4.0 Ratings (772 Votes)

a.Effective semi-annual return= Effective annual return/ 2

                                                           = 12.8%/ 2

                                                           = 6.4%

b.Effective quarterly return= Effective annual return/4

                                                     = 12.8%/ 4

                                                     = 3.2%

c.Effective monthly return= Effective annual return/ 12

                                                  =12.8%/ 12

                                                  = 1.0667%

In case of any query, kindly comment on the solution.
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Transcribed Image Text

You are looking at an investment that has an effective annualrate of 12.8 percent.a.What is the effective semiannual return? (Do not roundintermediate calculations and enter your answer as a percentrounded to 2 decimal places, e.g., 32.16.)b.What is the effective quarterly return? (Do not roundintermediate calculations and enter your answer as a percentrounded to 2 decimal places, e.g., 32.16.)c.What is the effective monthly return? (Do not roundintermediate calculations and enter your answer as a percentrounded to 2 decimal places, e.g., 32.16.)

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