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1.Calculate the effective annual yield of a bond that is currently selling at $98,039 and has 2 months to maturity. yield to maturity, YTM, can

1.Calculate the effective annual yield of a bond that is currently selling at $98,039 and has 2 months to maturity.

yield to maturity, YTM, can be calculated as ($100,000 - $98,039) / $98,039 = 0.02. Effective annual yield, EAY, is (1 + YTM)⁶ - 1 = 12.618%

isnsomeone please explain why the answer for EAY is to the power of 6. THANKS

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