Q384
Periodic rate if it is multiplied with per year number of compounding periods is called
A.
extrinsic rate of return
B.
intrinsic rate of return
C.
annual rate of return
D.
nominal annual rate
AnswerAnswer: Option D
Solution
Answer: Option D
Solution:
Periodic rate if it is multiplied with per year number of compounding periods is called nominal annual rate. The nominal interest rate is the interest rate before taking inflation into account, in contrast to real interest rates and effective interest rates.