An Investor Is Comparing an Account with Twelvers Bank That

question 19

Multiple Choice

An investor is comparing an account with Twelvers Bank that pays 12 per cent annually with one at Sixers Bank that pays 6 per cent semi- annually. What advice would you give?

• A) Returns from the two banks will be identical
• B) Invest with Twelvers to get a better return
• C) Invest with Sixers to get a better return
• D) Invest with both and pay the interest from Sixers into the Twelvers account

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Definitions:

Income Statement

The income statement is a financial report that gives a summary of a company's revenue, expenses, and profits over a specific period, showing how revenue is transformed into net income.

Business Users

Individuals or groups within an organization who utilize and apply business data and information in their decision-making processes.

Statement Of Owner's Equity

A financial document that shows changes in the owner's equity account over a period, including contributions, withdrawals, and the business's net income or loss.

Current Year

The period of time from January 1 to December 31 of the present calendar year.