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Question:
Given below are two statements:
Statement I: Relation between the nominal rate and effective rate : ref= (1 + 2) * r k +1, where ref = effective rate of interest r = nominal rate of interest k = numbers of conversion periods per year
Statement II: The nominal interest rate is also known as force of interest.
In the light of the above statements, choose the correct answer from the options given below
Given below are two statements:
Statement I: Relation between the nominal rate and effective rate : ref= (1 + 2) * r k +1, where ref = effective rate of interest r = nominal rate of interest k = numbers of conversion periods per year
Statement II: The nominal interest rate is also known as force of interest.
In the light of the above statements, choose the correct answer from the options given below
Statement I: Relation between the nominal rate and effective rate : ref= (1 + 2) * r k +1, where ref = effective rate of interest r = nominal rate of interest k = numbers of conversion periods per year
Statement II: The nominal interest rate is also known as force of interest.
In the light of the above statements, choose the correct answer from the options given below
Updated On: Jun 22, 2024
- Both Statement I and Statement II are true
- Both Statement I and Statement II are false
- Statement I is true but Statement II is false
- Statement I is false but Statement II is true
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The Correct Option is B
Solution and Explanation
The correct option is (B):Both Statement I and Statement II are false
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