Asked by
Beatriz Leite
on Dec 16, 2024
Verified
The market interest rate is often called the
A) stated interest rate.
B) effective interest rate.
C) contractual interest rate.
D) coupon interest rate.
Market Interest Rate
The prevailing rate of interest available in the market for securities of similar risk and maturity.
Effective Interest Rate
The actual return on investment or cost of a loan, taking into account the compounding of interest, as opposed to the nominal rate.
Stated Interest Rate
The annual interest rate declared on a loan or investment, not taking into account compounding or fees.
- Gain an understanding of the market interest rate concept and its critical role in determining bond prices and calculating interest.
Verified Answer
KM
Learning Objectives
- Gain an understanding of the market interest rate concept and its critical role in determining bond prices and calculating interest.