CFA Practice Question

There are 490 practice questions for this study session.

CFA Practice Question

An annual-pay bond has a yield to maturity of 5%. The bond-equivalent yield of the annual-pay bond is closest to ______.
A. 4.86%
B. 4.94%
C. 5.16%
Explanation: The bond-equivalent yield of an annual-pay bond = 2 x [(1 + yield on annual-pay bond)0.5 - 1] = 2 x [(1 + 0.05)0.5 - 1] = 4.94%

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