1.Can effective rate be greater than the nominal rate?
(Given the following notation: annual compounding: M=1, semiannual
compounding: M=2)
A. Yes, only when M=1
B. Yes, only when M>1
C. Yes, only when M>2
D. No, effective rate equals the nominal rate regardless
of M values
E. None of the above
2. Sue now has $125. How much would she have after 8
years if she leaves it invested at 8.0% with annual
compounding?
A. $205
B. $216
C. $231...
If the APR is 8% and compounding is weekly, what is (a) the
periodic rate and (b) the EAR?
Can you explain step by step, how to understand the question?
What is the nominal tariff and the effective rate of protection
if there is a 30% tariff on a file cabinet and a 40% tariff on the
imported steel? The file cabinet costs $200, half of the price is
due to manufacturing costs and half to imported steel.
Provide a comparison of production subsidy, a tariff, and a
quota using a graph of each in your explanation.
Explain a Customs Union
- Why does creating a Customs Union create trade...
The annual nominal rate is jm = 0.15pa. What is the
effective annual rate as a percentage to two decimal places? The
number of compounding periods is 8. Enter your answer as a decimal
eg 17.42% = .1742 to four decimal places. Accuracy of one basis
point. Tip: use excel to get the required accuracy.
If the effective interest rate is 20% per annum, What
is the nominal rate if it is:
a. Compounded daily (360 days)
b. Compounded daily (365 days)
c. Compounded weekly
d. Compounded monthly
e. Compounded quarterly
f. Compounded semi-annnually
g. Compounded annually
Suppose, Bank X offers you an account with a nominal rate of 3%
with semiannual compounding. Bank Y has the same Effective annual
rate as Bank X's effective rate, but interest will be compounded
monthly. 1. Find EAR for Bank X; 2. Find Nominal rate for Bank Y.
3. Which Bank offers you a better deal on deposits?