If a firm has high current and quick ratios, this always is a good indication that a firm is managing its liquidity position wel
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Answer:
The effective annual rate of interest is "10.38%".
Explanation:
The given values are:
Nominal annual interest rate,
Q = 10%
i.e.,
= 0.10
Quarterly compounding,
q = 4
Now,
The effective annual rate of interest will be:
=
On substituting the given values in the above formula, we get
=
=
=
=
=
On converting it into percentage, we get
= %