Please choose the correct answer. If annual compounding is used, then the nominal rate will be (a. above b equal to c. below) the effective annual rate. If more frequent compounding is used, the effective annual rate will be (a. above b equal to c. below) the nominal rate. (4 points) K. ANSWER: L.(1) What is the value at the end of Year 3 of the following cash flow stream if interest is 4% compounded semiannually? (Hint: You can use the EAR and treat the cash flows as an ordinary annuity or use the periodic rate and compound the cash flows individually.) Please list the inputs of your financial calculator. (3 points) 6 Periods 0 0 200 200 200 ANSWER: L.(2) What is the PV? Please list the inputs of your financial calculator. (3 points) ANSWER:| (3) What would be wrong with your answer to parts b(2) if you used the nominal rate, 4%. rather than the EAR or the periodic rate. INOM/2-4%/2-2% to solve the problems? Would the present value be overstated or understated? (4 points)