Question

you are looking at an investment that has an effective annual rate of 14.3 percent. what is the effective semiannual return? the effective quarterly return? the effective monthly return?

Answer 1

The effective semiannual return is 7.15%, the effective quarterly return is 3.575%, and the effective monthly return is 1.1917%.

Step-by-step explanation:

To find the effective semiannual return, we need to divide the annual rate by 2, since there are two semiannual periods in a year. So the effective semiannual return would be 14.3% / 2 = 7.15%.

Similarly, to find the effective quarterly return, we divide the annual rate by 4, since there are four quarterly periods in a year. Therefore, the effective quarterly return would be 14.3% / 4 = 3.575%.

To find the effective monthly return, we divide the annual rate by 12, since there are twelve monthly periods in a year. Hence, the effective monthly return would be 14.3% / 12 = 1.1917%.