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Problem 5 (4 points): a) Identify the following interest rate statements as either nominal or effective. Hint: How to identify if a given rate of
Problem 5 (4 points): a) Identify the following interest rate statements as either nominal or effective. Hint: How to identify if a given rate of interest is effective or nominal? 1.3% per week: Effective Nominal b) Identify the following interest rate statements as either nominal or effective. Hint: What is the difference between effective and nominal interest rates? 1% per week. compounded daily: Effective Nominal c) Identify the following interest rate statements as either nominal or effective. Hint: What is the difference between effective and nominal interest rates? Nominal 15% per year, compounded quarterly: Effective Nominal d) Identify the following interest rate statements as either nominal or effective. Hint: What is the difference between effective and nominal interest rates? Effective 1.5% per month, compounded hourly: Nominal Effective Problem 5 (4 points): a) Identify the following interest rate statements as either nominal or effective. Hint: How to identify if a given rate of interest is effective or nominal? 1.3% per week: Effective Nominal b) Identify the following interest rate statements as either nominal or effective. Hint: What is the difference between effective and nominal interest rates? 1% per week. compounded daily: Effective Nominal c) Identify the following interest rate statements as either nominal or effective. Hint: What is the difference between effective and nominal interest rates? Nominal 15% per year, compounded quarterly: Effective Nominal d) Identify the following interest rate statements as either nominal or effective. Hint: What is the difference between effective and nominal interest rates? Effective 1.5% per month, compounded hourly: Nominal Effective
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