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What are the Weaknesses of the traditional approach
The traditional approach to the scope of finance function evolved during 1920s and 1930s and dominated academic during 40's and through the early fifties. It has now been discarded as it suffers from serious limitations. Weaknesses of the traditional approach fall into two wide categories:
(i) those relating to the treatment of different topics and emphasis attached to them; and
(ii) those relating to the basic conceptual and analytical framework of the definitions and scope of the finance function.
(a) Find the nominal rate of interest j compounded quarterly which is equivalent to a 5% e ective rate of interest. (b) Which one will deliver a higher future value on a deposit
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