Which One of the Following Statements Concerning Interest Rates Is

question 131

Multiple Choice

Which one of the following statements concerning interest rates is correct?

• A) The stated rate is the same as the effective annual rate.
• B) An effective annual rate is the rate that applies if interest were compounded.
• C) The annual percentage rate increases as the number of compounding periods per year increases.
• D) Banks prefer more frequent compounding on their savings accounts.
• E) For any positive rate of interest, the effective annual rate will always exceed the annual percentage rate.

---

Definitions:

Micro-Macro Integration

A perspective in sociology that seeks to link the study of individual-level interactions and processes (micro) with larger-scale social structures and phenomena (macro).

United States

A country in North America composed of 50 states, known for its significant cultural and economic influence worldwide.

European Efforts

Refers to collective actions or endeavors pursued by European countries or entities, often in the context of political, economic, or social initiatives.

Systems

Refers to organized and interconnected sets of parts or components that interact in a way that achieves a complex function or purpose.