alleryStart learning →In a savings or loan context, the IRR is also called the:
Arisk-free rate of return
Bcurrent dividend yield
Cnominal coupon rate
Deffective interest rate
Answer & Solution
Correct answer: D. effective interest rate
For deposits and loans the IRR of the cash flows equals the effective interest rate actually earned or paid.
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Related questions
The same return received later gives an IRR that is:If cash flows are random variables, as in a life annuity, IRR uses their:The AIRR approach of Magni was introduced to solve problems of:In personal finance the IRR measures what type of performance?With no capital constraint, which projects does a firm accept to maximize value?Mutually exclusive projects are those from which:The equivalent annuity method divides the NPV by what to annualize it?The equivalent annuity method is often used to compare projects of: