stated interest rates?
A couple simple/silly questions:
- Why are most (if not all) interest rates stated as nominal rates instead of effective rates if the effective rate is actually what or the lender gets?
- I know how to annualize an interest rate, but what about revenue for instance. For example, if you have 4 months of revenue and want to ballpark what the company might have after a full year - do you just mutliply by 3??
- When someone says to anualize a rate, how do you know that means to give them the effective annual rate [(1+r)n] or the nominal rate (simply multiplying by the # of periods in the year) ??
Thanks for the help!!
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