How to calculate annual yield for security?, Financial Management

Illustration 

The monthly yield of a mortgage backed security is 0.75%. Find out the annual yield for this security.

Solution

Annual yield = 2 [(1 + 0.0075)6 - 1]

         Annual yield = 9.17%.

Posted Date: 9/10/2012 2:01:53 AM | Location : United States







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