For a 4.75% nominal rate, compounded continuously, the effective interest is:

• 4.4846%

• 4.3416%

• 3.1415%

• 4.9171%

In most business transactions and economy studies, interest is compounded at

the end of discrete periods.

• True

• False

5% nominal rate compounded monthly. What are the effective interests?

• 6.11%

•  5.12%

• 5.11%

• 6.12%

A nominal rate is

• Annual Rate

• Effective Interests Rate

• Expected Inflation Rate

• Both A&B are correct

How many quarterly in a year?

• 1 quarterly period in a year

• 2 quarterly periods in a year

• 3 quarterly periods in a year

• 4 quarterly periods in a year

Which statement is true about nominal rate?

• This is the rate that you earn (or pay)

• Is an interest rate that has been adjusted to remove the effects of inflation

• Refer to interest rate before taking inflation into account

• No statement is correct

 How many bimonthly in a year?

• 12

• 24

• 2

• 6

The initial cash flow (A1) in a geometric gradient series occurs when_____?

•  At the beginning of period one

• At the end of period one

• At the beginning of period two

• At the end of period two

What is a geometric gradient series?

• Sometimes cash flows change by a constant rate, each period this is a geometric gradient series.

• The geometric gradient series is a series of cash flows in each cast that increase (or decrease) by an inconstant rate.

• A geometric gradient series occurs when cash flows vary at an inconsistent pace between periods.

• The geometric gradient series is a sequence of cash flows in each cast that increase (or fall) at an inconsistent rate.

Suppose the geometric gradient begins with $1,000 at EOY one and decreases by 20 % per year after the first year. Determine P.

• $1,249.34

• $1,849.38

• $1,383.38

• $1,749.3