Answer:
7.12%
Explanation:
ffective annual yield = (1+i/m)m - 1
i = coupon rate = 7%
m = compounding frequency = 2
Effective annual yield = (1+0.07/2)^2 - 1
Effective annual yield = (1+0.035)^2 - 1
Effective annual yield = (1.035)^2 - 1
Effective annual yield = 1.071225 - 1
Effective annual yield = 0.071225
Effective annual yield = 7.12%
