a)What is the effective annual yield (EAY) of the bond below? Please use the following Apple bond quote on Bloomberg as a reference:

b)

What is the effective annual yield of a 10-year, 6% quarterly coupon bond priced at 95?

• 5.425%
• 6.690%
• 6.859%
• 5.318%
• 6.000%

Question 14 of 71 What is the effective annual yield (EAY) of the bond below? Please use the following Apple bond quote on Bloomberg as a reference: DES APPLE INC AAPL 3.85 05/04/43 Corp AAPL 3.85 05/43 88.852/88.852 |(4.545/4.545) TRAC Page 1/11 Description: Bond 96 Sell 94 Notes 95 Buy 97) Settings 2D Bond Description 22 Issuer Description Issuer Information | Name Industry Communications Equipment Security Information Mkt of Issue Global Country Rank |Identifiers Pages 1) Bond Info 2) Addtl Info EJ6592533 APPLE INC ID Number CUSIP 037833AL4 3) Covenants 4) Guarantors 5) Bond Ratings 6) Identifiers T)Exchanges 8) Inv Parties NISI Bond Ratings US037833AL42 Moody's Currency USD Series Type US Aa1 Sr Unsecured S&P AA+ Composite Coupon 3.85 |Cpn Freq S/A Day Cnt 30/360 Maturity 05/04/2043 MAKE WHOLE @15 until 05/04/43/BULLET Fixed AA+ 9) Fees, Restrict 10) Schedules 11) Coupons Issuance & Trading Amt Issued/Outstanding Iss Price 99.41800 Quick Links 32) ALLQ Pricing 33) QRD Quote Reca Issue Spre ad 34) TDH Trade Hist 3,000,000.00 (M) / 3,000,000.00 (M) USD 100.00bp vs T 2 % 11/15/42 |(1)STREET CONVENTION USD Min Piece/Increment 2,000.00/1,000.00 35) CAC Corp Action Calc Type 36) CF Prospectus Announcement Date Interest Accrual Date 04/30/2013 05/03/2013 05/03/2013 11/04/2013 Par Amount Book Runner Reporting 3) CN Sec News 38) HDS Holders ) VPR Underly Inf 1st Coupon Date 1,000.00 1st Settle Date DB,GS TRACE 66) Send Bond Australia 61 2 9777 8600 Brazil 5511 3048 4500 Europe 44 20 7330 7500 Gernany 49 69 9204 1210 Hong Kong 852 2977 6000 Copyright 2014 Bloonberg Finance L.P. SN 658873 EDT GMT-4 00 6598-434-209-Apr-2014 20 21 43 E U.S. 1 212 318 2000 Singapore 65 6212 1000 Japan 81 3 3201 890 3.850% 4.494% 4.545% 4.597% 4.655%