Question
A bank quotes an interest rate of 8% pa with quarterly compounding. Note that another way of stating this rate is that it is an
A bank quotes an interest rate of 8% pa with quarterly compounding. Note that another way of stating this rate is that it is an annual percentage rate (APR) compounding every quarter. Which of the following statements about this rate is NOT correct? All percentages are given to 5 decimal places.
a.
Effective quarterly rate is 2.00000% per quarter.
b.
Effective monthly rate is 0.66227% per month.
c.
Continuously compounded semi-annual rate is 3.85306% per semi-annual.
d.
The annual percentage rate (APR) compounding every month is 7.94725%.
e.
Continuously compounded quarterly rate is 1.98026% per quarter.
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Dynamics Of International Finance
Authors: Ruchi Mehrotra Joshi
1st Edition
1685078389, 978-1685078386
