Nominal annual rate: Difference between revisions
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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. | ||
365 x 0.014% = 5.11%. | '''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%. | |||
Revision as of 11:36, 18 March 2015
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.
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.
