Define a the stated or quoted or nominal rate and b the, Financial Management

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Define a the stated or quoted or nominal rate and b the

(1) Define (a) the stated, or quoted, or nominal rate and (b) the effective annual rate.

(2) Will the future value be larger or smaller if we compound an initial amount more often than annually, for example, every 6 months, or semiannually, holding the stated interest rate constant? Why? (3) Can the effective annual rate ever be equal to the nominal (quoted) rate?

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Financial Management: Define a the stated or quoted or nominal rate and b the

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