The annual percentage yield is also referred to as the:
A)quoted rate.
B)nominal rate.
C)effective annual rate.
D)all of the above.

Question

Quizplus · Accepted Answer

The annual percentage yield (APY) is also referred to as the effective annual rate (EAR), as it takes into account the compounding frequency of the interest rate. The quoted rate may not accurately reflect the true return due to compounding, while the nominal rate only takes into account the stated interest rate without considering the frequency of compounding. Therefore, the best choice is C, as it accurately represents the true return on an investment.

The Annual Percentage Yield Is Also Referred to as The