Datung Corporation has $20,000 excess cash that it might invest in marketable securities. It considers investing the money for a holding period of 3 months. The transactions fee arising from this is $300.

Required: What is the break-even yield (annual basis) for the three-month period?

Hint: Breakeven yield is the interest rate at which the income from investment equals the transaction costs incurred. Hence, based on P x R x T.