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Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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The half-yearly nominal rate of discount convertible monthly is 4.2%. Calculate the force of interest per annum which is equivalent to this interest rate.
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- Assume an effective compound interest rate 6% per annum. a) The nominal interest rate payable semi-annually b) The effective interest rate payable quarterly c) The effective rate of discount per annum d) The nominal rate of discount payable monthlyarrow_forwardIf the Effective Annual Rate of interest is 5.21% assuming quarterly compounding, then what is the nominal annual rate? a) Nominal Interest Rate of 6.25% compounded annually over 4 years b) Nominal Interest Rate of 5.50% compounded monthly over 5 years c) Nominal Interest Rate of 5.75% compounded annually over 6 years d) Nominal Interest Rate of 6.00% compounded quarterly over 5 yearsarrow_forwarda)Find the nominal rate per annum convertible monthly that pays an interest of £200 on an initial capital of £1,000 at the end of 3 years. b)The annual effective interest rate is 5%. Find the monthly effective discount rate. c)Explain time-consistency of compound interest.arrow_forward
- The nominal interest rate compounded quarterly, ¿(4) is 6%. Let ¿ be the annual effective interest rate, d be the annual effective discount rate, d(12) be the nominal discount rate compounded monthly and be the annual constant force of interest. Calculate i + 2d + 3d(¹2) + 46. A 59.14% B 59.34% C 59.54% D 59.74% E 59.94%arrow_forwardFind the equivalent interest rates for the following: a. Nominal interest rate compounded quarterly that is equivalent to 5% compounded semi-annually. % Round to two decimal places b. Nominal interest rate compounded monthly that is equivalent to 3.8% compounded quarterly. % Round to two decimal places c. Nominal interest rate compounded semi-annually that is equivalent to 4.5% compounded quarterly. % Round to two decimal placesarrow_forwardGiven force of interest is 7.3% per 3 years, calculate the equivalent nominal interest rate per annum convertible quarterly. (correct answer = 2.44075) (no tables, only formulas, please)arrow_forward
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