If an Investment Provides a 1

question 28

Multiple Choice

If an investment provides a 1.25% return quarterly, its effective annual rate is

• A) 5.23%.
• B) 5.09%.
• C) 4.02%.
• D) 4.04%.

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Definitions:

Underwriter

In insurance law, the insurer, or the one assuming a risk in return for the payment of a premium.

Premium

The amount paid for an insurance policy, reflecting the cost of coverage.

Insurable Interest

An interest either in a person’s life or well-being or in property that is sufficiently substantial to justify insuring against injury to or death of the person or damage to the property.

Enforceable

Describing a legal agreement or obligation that can be upheld and compelled by law through legal action.