Scenario: Color-Me-Green Inc.
Color-Me-Green Inc., a U.S.-based clothing merchant, has started doing business internationally. Having subsidiaries in several countries, the company must integrate financial information from all its subsidiaries with the U.S. home office at the end of the year.
-In an attempt to raise money in Country B,Color-Me-Green was quoted an interest rate of 14 percent by a local bank.This quoted rate is called the ________ rate.
A) cross
B) artificial
C) nominal
D) exchange

Question

Quizplus · Accepted Answer

The quoted rate of 14% is the nominal rate, which is the stated interest rate without adjusting for inflation, currency exchange rates or other factors. It is not a cross rate, artificial rate or exchange rate.

Scenario: Color-Me-Green Inc. Color-Me-Green Inc., a U.S.-Based Clothing Merchant, Has Started Doing Business