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For Wendy, here's the calculation for treasuries (and any other bond, I think):

Return/Price => actual return (lets say 1.025 for our example)

To annualize on an APR basis, take the fraction part (i.e. subtract 1) to get 0.025 and multiply by days-in-year/days-for-bond.

In the case of 365/182, times 0.025, would be 0.0501... or 5.01%

To annualize on an APY basis, take the full return above (1.025) and raise it to the power of days-in-year/days-for-bond.

So, 1.025 ^ (365/182) = 1.0508... or 5.08%


Thanks! I really like to see how to do the math. And you explain it very well.

Vickifool
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