Question: Write True if the statement is correct and False if the statement is wrong.11. If the nominal interest rate is greater than the effective interest
Write True if the statement is correct and False if the statement is wrong.11. If the nominal interest rate is greater than the effective interest rate, the debt security is issued at a discount. 12. Maturity risk premium is imputed on a short-term debt security to offset the losses that could be encountered by the decreasing price of debt instruments. 13. The nominal risk free rate shall be computed using the cross term format when the inflation rate is significantly low. 14. The annual percentage rate, also known as simple interest, considers the effect of compounding. 15. The effective annual rate, also known as annual percentage yield, is always higher than the annual percentage rate
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
