- CFA Exams
- CFA Level I Exam
- Study Session 14. Fixed Income (1)
- Reading 44. Introduction to Fixed-Income Valuation
- Subject 5. Yield Measures for Fixed-Rate Bonds

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**CFA Practice Question**

The stated annual yield-to-maturity on a semi-annual bond basis is 4.96%. If you convert it to a periodicity of four, the annual yield-to-maturity will be ______ 4.96%.

B. equal to

C. higher than

A. lower than

B. equal to

C. higher than

Correct Answer: A

Compounding more frequently at a lower annual rate corresponds to compounding less frequently at a higher annual rate.

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