Interest rates are quoted by stating the ____ followed by the compounding period.
A)effective annual rate
B)nominal rate
C)yield
D)coupon rate
E)none of the above

Question

Quizplus · Accepted Answer

Nominal rate is the stated rate of interest, which is typically quoted on an annual basis. The compounding period refers to how often the interest is added to the principal, such as annually, semi-annually, quarterly, or monthly. Therefore, interest rates are quoted by stating the nominal rate followed by the compounding period (e.g. 6% annually compounded quarterly).

Interest Rates Are Quoted by Stating the ____ Followed by the Compounding