Q379
rate which is divided by compounding periods to calculate periodic rate must be
A.
annuity return
B.
deferred annuity return
C.
nominal rate
AnswerD.
semi-annual discount rate
Answer: Option C
Solution
Answer: Option C
Solution:
Rate which is divided by compounding periods to calculate periodic rate must be nominal rate. Nominal interest rate refers to the interest rate before taking inflation into account. Nominal can also refer to the advertised or stated interest rate on a loan, without taking into account any fees or compounding of interest.