Answered

Discover answers to your questions with Westonci.ca, the leading Q&A platform that connects you with knowledgeable experts. Explore thousands of questions and answers from a knowledgeable community of experts ready to help you find solutions. Join our platform to connect with experts ready to provide precise answers to your questions in different areas.

When comparing two investments with the same effective rate, one with a 4-year term and semi-annual compounding and one with a 2-year term and quarterly compounding, the nominal rate of the 4-year term instrument is ____ the nominal rate of the 2-year term instrument.

A. the same as

B. higher than

C. lower than

Sagot :

The 4-year term instrument's nominal rate is higher than the 2-year term instrument's nominal rate.

What is nominal rate?

The increase in payment you make to the lender for using the borrowed funds is known as the nominal interest rate.

The rate of compounding is higher for 2-year investments than for 4-year investments, which are compounded semi-annually.

As a result, option (b) is correct.

Learn more about on nominal rate, here:

https://brainly.com/question/13324776

#SPJ1

Thank you for choosing our service. We're dedicated to providing the best answers for all your questions. Visit us again. Thank you for your visit. We're committed to providing you with the best information available. Return anytime for more. Thank you for trusting Westonci.ca. Don't forget to revisit us for more accurate and insightful answers.