Question
Question 30 Which of the following statements are incorrect? a. APR is a nominal rate, standing for annualized percentage return. It is quoted to you;
Question 30
Which of the following statements are incorrect?
| a. APR is a nominal rate, standing for annualized percentage return. It is quoted to you; EFF or EAR is the effective or equivalent rate that takes account of the concept of compounding into account. | ||
| b. Periodic interest rate is defined as APR/M, where M is the number of compounding periods | ||
| c. When M is 1, or annually compounded, APR=EFF; if M>1, APR | ||
| d. The formula of EFF=(1+ARP/M)^M-1 | ||
| e. When M is 1, or annually compounded, APR=EFF; if M>1, APR>EFF |
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Fundamentals Of Corporate Finance
Authors: David W Blackwell, Robert Parrino, David S Kidwell
1st Edition
0471270563, 9780471270560
