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No tables, ONLY FORMULAS, please correct answers; (i) ?^(12) = 0.050104??, (ii) ?=0.020408?(1/4)? (iii) ?^(2) = 0.071116 ??

No tables, ONLY FORMULAS, please correct answers; (i) ?^(12) = 0.050104??, (ii) ?=0.020408?(1/4)? (iii) ?^(2) = 0.071116 ??

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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No tables, ONLY FORMULAS, please

correct answers; (i) ?^(12) = 0.050104??,
(ii) ?=0.020408?(1/4)?
(iii) ?^(2) = 0.071116 ??

(1) (ii) (iii) Calculate the nominal rate of interest per annum convertible monthly that is equivalent to a force of interest of 5% per annum. You are told that the annual nominal rate of discount is 8% convertible quarter- yearly. Calculate the equivalent effective quarter-yearly rate of interest. Calculate the annual nominal rate of interest convertible half-yearly that is equivalent to an effective rate of interest of 15% per two years.
Transcribed Image Text:(1) (ii) (iii) Calculate the nominal rate of interest per annum convertible monthly that is equivalent to a force of interest of 5% per annum. You are told that the annual nominal rate of discount is 8% convertible quarter- yearly. Calculate the equivalent effective quarter-yearly rate of interest. Calculate the annual nominal rate of interest convertible half-yearly that is equivalent to an effective rate of interest of 15% per two years.
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