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Give your answers to the following questions as percentages to 3 de imal places, showing working for each part. (a) Suppose we have an account which earns a nominal annual in terest rate of 4% paid monthly. What is its annual percentag yield? (b) What would the nominal annual interest rate of an account hav to be if the interest is earned monthly and the annual percentag

Give your answers to the following questions as percentages to 3 de imal places, showing working for each part. (a) Suppose we have an account which earns a nominal annual in terest rate of 4% paid monthly. What is its annual percentag yield? (b) What would the nominal annual interest rate of an account hav to be if the interest is earned monthly and the annual percentag

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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1. Give your answers to the following questions as percentages to 3 dec- imal places, showing working for each part. (a) Suppose we have an account which earns a nominal annual in- terest rate of 4% paid monthly. What is its annual percentage yield? (b) What would the nominal annual interest rate of an account have to be if the interest is earned monthly and the annual percentage yield is 5%? (c) What would the nominal annual interest rate of an account have to be if the interest is earned continuously and the annual per- centage yield is 5%?
Transcribed Image Text:1. Give your answers to the following questions as percentages to 3 dec- imal places, showing working for each part. (a) Suppose we have an account which earns a nominal annual in- terest rate of 4% paid monthly. What is its annual percentage yield? (b) What would the nominal annual interest rate of an account have to be if the interest is earned monthly and the annual percentage yield is 5%? (c) What would the nominal annual interest rate of an account have to be if the interest is earned continuously and the annual per- centage yield is 5%?
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