Use the Table for the Question(s)below

question 32

Multiple Choice

Use the table for the question(s) below.
Consider the following investment alternatives:
-The lowest effective rate of return you could earn on any of these investments is closest to:

• A)6.150%.
• B)6.250%.
• C)6.289%.
• D)6.300%.

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Definitions:

National Banks

Financial institutions that are chartered by the federal government and play a major role in the country's banking system.

Federal Deposit Insurance Corporation (FDIC)

A United States government corporation providing deposit insurance to depositors in U.S. commercial banks and savings institutions.

Member Banks

Banks that are part of the Federal Reserve System and are regulated by the Federal Reserve Board.

Mortgage-Backed Securities

Financial instruments secured by a pool of mortgages, which generate income from the mortgage payments.