Question
A bank will pay you 5% interest on a deposit for three years, but forgets to specify the daycount basis or compounding frequency of the
A bank will pay you 5% interest on a deposit for three years, but forgets to specify the daycount basis or compounding frequency of the rate. You find yourself in the fortunate position of being able to choose monthly, semi-annual or annual compounding; and 30/360, act/360 or act/365 daycount basis. Which daycount and frequency combination should you choose?
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Finance Plain And Simple
Authors: Sebastian Nokes
1st Edition
0273731297, 978-0273731290
