Which of the following statements is correct? A. a. Except in situations where compounding occurs annually, the periodic interest rate exceeds the nominal interest rate. B. b. The effective annual rate always exceeds the nominal rate, no matter how few or many compounding periods occur each year. C. c. If compounding occurs more frequently than once a year, and if payments are made at times other than at the end of compounding periods, it is impossible to determine present or future values, even with a financial calculator. The reason is that under these conditions, the basic assumptions of discounted cash flow analysis are not met. D. d. Assume that compounding occurs quarterly, that the nominal interest rate is 8 percent, and that you need to find the present value of $ 1,000 due 6 months from today. You could get the correct answer by discounting the $ 1,000 at 2 percent for 2 periods. E. e. Statements a, b, c, and d are all false.
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