Find the Effective Rate Corresponding to the Given Nominal Rate

question 234

Multiple Choice

Find the effective rate corresponding to the given nominal rate.Round your answers to two decimal places. 15% / year compounded semiannually _____%
9% / year compounded quarterly _____%

• A)9.31%, 9.38%
• B)9.38%, 9.42%
• C)15.56%, 9.31%
• D)9.31%, 9.42%

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Definitions:

Economic Entity

A unit in the economy that is capable of engaging in financial activities, such as a person, corporation, or government entity.

GAAP

stands for Generally Accepted Accounting Principles, which are the standard framework of guidelines for financial accounting used in any given jurisdiction.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board that guide how financial transactions and events should be reported.

Revaluation

An adjustment made to the book value of an asset to accurately reflect its current market value.