For a Two-Year GIC, What Nominal Rate Compounded Quarterly Would

question 283

Short Answer

For a two-year GIC, what nominal rate compounded quarterly would pay the same amount of interest as 3.8% compounded annually?

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Definitions:

Market Price

The present cost at which one can buy or sell an item or service in a competitive market environment.

Perfectly Elastic

A situation where the demand or supply responds infinitely to changes in price, resulting in a horizontal demand or supply curve.

Perfectly Inelastic

A market condition where the quantity demanded or supplied does not change in response to price changes; the demand or supply curve is perfectly vertical.

Relatively Elastic

Describes a situation where a small change in price leads to a significant change in quantity demanded or supplied.