question archive D Try to choose the correct answer, note that four wrong answers will cancel one correct answer (i
D Try to choose the correct answer, note that four wrong answers will cancel one correct answer (i
Subject:FinancePrice:2.86 Bought3
D Try to choose the correct answer, note that four wrong answers will cancel one correct answer (i.e. each wrong answer will be penalized by -1 pt.): [ 4 pts. ] Which one of the following value is closest to the effective rate per semi-annual period, if the interest rate is given as 12% per year, compounded 2 times year? Select one: O a. 5.7000 b. 6.3000 c. 6.0000 0 d. 5. 1000
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Interest rate is 12% per year compounded 2 times a year. It means Annual percentage rate or nominal rate (r) is 12%
number of compounding in year (m) =2
it means it is semiannual compounded as there is 2 semiannual period in a year
Effective rate per semiannual period = nominal rate/number of semianual period in year
or r/m
=12%/2
=6%
So answer is C 6.000%
