The market interest rate is also referred to as the:
A)contractual rate.
B)coupon rate.
C)effective rate.
D)stated rate.

Question

Quizplus · Accepted Answer

The market interest rate is also known as the effective rate because it represents the true cost of borrowing or the rate of return on an investment after accounting for all associated fees and expenses. The contractual rate or stated rate is the rate specified in a contract or agreement, such as the interest rate on a loan or a bond. The coupon rate is the fixed interest rate paid on a bond or other fixed-income security. Therefore, neither choice A nor B is a fitting answer.

The Market Interest Rate Is Also Referred to as The