Which of the following is CORRECT? When discounting an amount to be received in one year's...
Which of the following is CORRECT? When discounting an amount to be received in one year's time at a rate that is quoted as 12% compounding quarterly, we can:
Select one:
A. Discount the amount using an effective monthly rate of 1% where the number of periods is 12.
B. Discount the amount using an effective annual rate (EAR) of (1+0.03)^4-1 =12.5509% where number of periods is 1.
C. Discount the amount using the annual rate of 12% where number of periods is 1.
D. None of the above
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Which of the following is CORRECT? When discounting an amount to be received in one year's...
Question 10 Which of the following is CORRECT? When discounting an amount to be received in...
Question 10 Which of the following is CORRECT? When discounting an amount to be received in one year's time at a rate that is quoted as 12% compounding quarterly, we can: Select one: A. Discount the amount using an effective monthly rate of 1% where the number of periods is 12. B. Discount the amount using an effective annual rate (EAR) of (1+0.03)^4-1 =12.5509% where number of periods is 1. C. Discount the amount using the annual rate of 12%...
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PLEASE ANSWER THIS QUESTION AND
MOST ANSWER TO QUANTITATIVE PROBLEM
THANKS YOU
Different compounding periods, are used for different types of investments. In order to properly compare investments or loans with different compounding periods, we need to put them on a common basis. In order to do this, you need to understand the difference between the nominal interest rate (INOM) and the effective annual rate (EAR). The -Select- v interest rate is quoted by borrowers and lenders, and it is...
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THANK YOU
Different compounding periods, are used for different types of investments. In order to properly compare investments or loans with different compounding periods, we need to put them on a common basis. In order to do this, you need to understand the difference between the nominal interest rate (INOM) and the effective annual rate (EAR). The nominal interest rate is quoted by borrowers and lenders, and it is also called the annual percentage rate...
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PARTI: MULTIPLE CHOICE-Choose the letter of the most correct answer for each question. Record only one answer per question. 1. Which following statement is true, assuming an interest rate of greater than 0% a. The present value of a dollar to be received one year from today is ALWAYS worth more than one dollar. b. The present value of a dollar to be received one year from today is ALWAYS worth less than one dollar. c. The present value of...
PLEASE ANSWER THIS QUESTION AND
MOST ANSWER TO QUANTITATIVE PROBLEM
THANKS YOU
Different compounding periods, are used for different types of investments. In order to properly compare investments or loans with different compounding periods, we need to put them on a common basis. In order to do this, you need to understand the difference between the nominal interest rate (INOM) and the effective annual rate (EAR). The -Select- v interest rate is quoted by borrowers and lenders, and it is...
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Which one of the following statements is correct? Time and future values are inversely related, all else held constant. The more frequent the compounding period, the lower the effective annual rate given a fixed annual percentage rate. When comparing loans you should compare the effective annual rates. An increase in a positive discount rate increases the present value. A perpetuity comprised of 5100 monthly payments is worth less than an annuity of S100 monthly payments provided the discount rates are...
7. (a) Will the future value be larger or smaller if we compound an initial amount more often than annually--for example, every 6 months, or semiannually - holding the stated interest rate constant? Explain your answer. (b-1) What is the future value of $200 after three years under 12% semiannual compounding? (b-2) What is the effective annual rate for 12% interest with semiannual compounding? (C-1) What is the future value of $200 after three years under 12% quarterly compounding?) (c-2)...
PLEASE ANSWER THIS TWO QUESTION
THANK YOU
Different compounding periods, are used for different types of investments. In order to properly compare investments or loans with different compounding periods, we need to put them on a common basis. In order to do this, you need to understand the difference between the nominal interest rate (INOM) and the effective annual rate (EAR). The nominal interest rate is quoted by borrowers and lenders, and it is also called the annual percentage rate...
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