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Assume the inflation rate is 3.78% APR, compounded annually. Would you rather earn a nominal return of 5.03% APR, compounded semiannually, or a real return
Assume the inflation rate is 3.78% APR, compounded annually. Would you rather earn a nominal return of 5.03% APR, compounded semiannually, or a real return of 2.25% APR, compounded quarterly? (Note: Be careful not to round any intermediate steps less than six decimal places.) To put these on the same basis, you must convert them both to nominal EARS The EAR for 5.03% APR, compounded semiannually is (Type your answer in decimal format. Round to six decimal places.) The nominal EAR for a real 2.25% APR, compounded quarterly is (Type your answer in decimal format. Round to six decimal places.) You would rather earn (Select from the drop-down menu.)
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