For a given effective annual rate, the quoted rate ______ as the compounding frequency increases.
A)does not change
B)increases
C)decreases
D)There is no connection between the effective annual rate and the quoted rate.

Question

Quizplus · Accepted Answer

The quoted rate decreases as the compounding frequency increases because the more frequent the compounding, the greater the effective annual rate.

For a Given Effective Annual Rate, the Quoted Rate ______