Effective Annual Yield = 3.90%
Daily Interest Rate = (1 + Effective Annual Yield)^(1/365) -
1
Daily Interest Rate = (1 + 0.0390)^(1/365) - 1
Daily Interest Rate = 1.000105 - 1
Daily Interest Rate = 0.000105 or 0.0105%
Annual Nominal Rate = 365 * Daily Interest Rate
Annual Nominal Rate = 365 * 0.0105%
Annual Nominal Rate = 3.833%
The annual nominal rate is 3.833%
What is the annual nominal rate compounded daily for a bond that has an annual yield...
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