What is the semi-annually compounded nominal rate that is equivalent to 16% compounded quarterly?
A) 9.91%
B) 17.44%
C) 15.02%
D) 16.32%
E) 16.98%

Question

Quizplus · Accepted Answer

To find the equivalent semi-annual nominal rate, convert the quarterly compounded rate to an effective annual rate, then convert that to a semi-annual nominal rate. The effective annual rate for 16% compounded quarterly is approximately 16.99%, which corresponds to a semi-annual nominal rate of 16.32%.

What Is the Semi-Annually Compounded Nominal Rate That Is Equivalent