The market rate of interest is often called the
A) stated rate.
B) effective rate.
C) coupon rate.
D) contractual rate.

Question

Quizplus · Accepted Answer

The market rate of interest is often referred to as the effective rate. This is because it reflects the actual cost of borrowing when considering compounding periods, unlike the stated, coupon, or contractual rates which may not account for the frequency of compounding.

The Market Rate of Interest Is Often Called the