Question
1) What is the effective annual rate (EAR) for a nominal rate (quarterly compounding) of 3.14 %? SET YOUR CALCULATOR TO 4 DECIMAL PLACES THEN
1)
What is the effective annual rate (EAR) for a nominal rate (quarterly compounding) of 3.14 %?
SET YOUR CALCULATOR TO 4 DECIMAL PLACES THEN INPUT THE NUMBER AS PERCENTAGE ROUNDING TO 2 DECIMALS. DO NOT ENTER THE % SYMBOL..i.e. if your answer is 7.77%, enter it as 7.77
2)
Consider the following returns and states of the economy for TZ.Com.:
Economy | Probability | Return |
Weak | 15% | -1% |
Normal | 50% | 4% |
Strong | 35% | 10% |
What is the standard deviation of TZ's returns? SET YOUR CALCULATOR TO FOUR DECIMAL PLACES AND ROUND TO 2 DECIMAL PLACES AT THE END. DO NOT ENTER THE %. FOR EXAMPLE, IF YOUR ANSWER IS 7.70% ENTER IT AS 7.70.
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