What Is the Effective Annual Return (EAR) for an Investment

question 78

Multiple Choice

What is the effective annual return (EAR) for an investment that pays 10 percent compounded annually?

• A)equal to 10 percent
• B)greater than 10 percent
• C)less than 10 percent
• D)This question cannot be answered without knowing the dollar amount of the investment.
• E)None of the above is correct.

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Definitions:

Aversive Event

An unpleasant or noxious event or situation that an individual seeks to avoid or escape.

Negative Reinforcement

A behavioral strategy involving the removal of an unpleasant stimulus to increase the likelihood of a desired behavior being repeated.

Demoted

The act of lowering someone's rank, status, or position, often as a result of performance evaluation or organizational restructuring.

Extinction

The process by which a species, breed, or family of organisms becomes permanently incapable of reproducing and therefore dies out.