Nominal annual rate: Difference between revisions
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The rate of return ''per annum'' named or quoted in a market, under the quoting convention for the given market. | The rate of return ''per annum'' named or quoted in a market, under the quoting convention for the given market. | ||
Market quotations are usually given per annum, and for this reason the term ''nominal rate'' is often used interchangeably with nominal annual rate. | Market quotations are usually given per annum, and for this reason the term ''nominal rate'' is often used interchangeably with nominal annual rate. | ||
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365 x 0.014% = 5.11%. | 365 x 0.014% = 5.11%. | ||
Not to be confused with the effective annual rate. | Not to be confused with the effective annual rate. | ||
Revision as of 21:50, 13 December 2014
The rate of return per annum named or quoted in a market, under the quoting convention for the given market.
Market quotations are usually given per annum, and for this reason the term nominal rate is often used interchangeably with nominal annual rate.
For example, GBP overnight interest payable at the periodic rate of 0.014% per day, would conventionally be quoted on a nominal annual basis as:
365 x 0.014% = 5.11%.
Not to be confused with the effective annual rate.
Sometimes also known as market rate or nominal rate.
