Question
A bank quotes an interest rate of 10% pa with semi-annual compounding. Note that another way of stating this rate is that it is an
A bank quotes an interest rate of 10% pa with semi-annual compounding. Note that another way of stating this rate is that it is an annual percentage rate (APR) compounding every semi-annual. Which of the following statements about this rate is NOT correct? All percentages are given to 5 decimal places.
a.
Continuously compounded semi-annual rate is 4.87902% per quarter.
b.
Effective quarterly rate is 5.00000% per semi-annual.
c.
Effective quarterly rate is 2.46951% per month.
d.
Continuously compounded annual rate is 9.75803% per half year.
e.
The annual percentage rate (APR) compounding every quarter is 8.79902%.
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Behavioural Approaches To Corporate Governance
Authors: Cameron Elliott Gordon
1st Edition
1138611395, 978-1138611399
