The Current (Simple Annualized) Yield, Based on the Holding-Period Return

question 12

Short Answer

The current (simple annualized) yield, based on the holding-period return for the most recent 7 days, is reported for a money market mutual fund as 6.17%. What is the fund's corresponding effective (annualized) yield?

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Definitions:

Savings

The portion of disposable income not spent on consumption of goods and services, set aside for future use or investment.

Investment

The action of allocating resources, usually money, with the expectation of generating an income or profit.

Price Level

The average of current prices across all goods and services in an economy, indicating the overall cost of living or inflation rate.

Purchasing Power

How much goods or services one unit of currency can procure, defining the currency's value.