Nominal

Definition:

In name only. Differences in compounding cause the nominal rate to differ from the effective interest rate. Inflation causes the purchasing power of money to differ from one time to another.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Combination strategy

A strategy in which a put and call with different strike prices and the same expiration are either both bought or both sold. Related: Straddle

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