For quesiton 4, can someone please enligten me on why we have to get to the semiannual return and then double to get the total return? Why can’t we just take the ending value (107.525) / beginning value (103) and minus 1?
Much obliged.
I meant to ask the same question after I took MC-C but got sidetracked before I could post. Very curious to hear someone explain this one. I was pretty annoyed at the answer.
The way your doing it is EAR, while the answer is BEY. Maybe somewhere in the question it implies the answer should be BEY?
BEY = 2 x semiannual
EAY = (1+BEY/2)^2
You wanna use EAR to compounding but when question asks about BEY then you have to convert it.