Question

Given below are two statements:
Statement I: Relation between the nominal rate and effective rate : ref= (1 + 2) * r k +1, where ref = effective rate of interest r = nominal rate of interest k = numbers of conversion periods per year
Statement II: The nominal interest rate is also known as force of interest.
In the light of the above statements, choose the correct answer from the options given below

• A. Both Statement I and Statement II are true
• B. Both Statement I and Statement II are false
• C. Statement I is true but Statement II is false
• D. Statement I is false but Statement II is true

Answer 1

Answer: (B)

Both Statement I and Statement II are false

Answer 2

The correct option is (B):Both Statement I and Statement II are false