The Table Above Shows the Rate of Return (APR) for |

question 9

Multiple Choice

$$\begin{array} { | l | c | c | c | c | } \hline \text { Investment: } & \mathrm { A } & \mathrm { B } & \mathrm { C } & \mathrm { D } \\\hline \text { Rate of Return: } & 5.7 \% & 5.6 \% & 5.5 \% & 5.5 \% \\\hline \text { Compounding } & \text { Yearly } & \text { Semiannually } & \text { Monthly } & \text { Weekly } \\\hline\end{array}$$
The table above shows the rate of return (APR) for four investment alternatives. Which offers the
highest EAR?

• A) Investment A
• B) Investment B
• C) Investment C
• D) Investment D

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Definitions:

Labor

The application of both mental and physical human capacities for the generation of goods and services.

Marginal Physical Product

The additional quantity of output that is produced by using one more unit of a given input, assuming all other inputs remain constant.

Total Revenue Product

The total revenue generated by a firm from selling the output produced by an additional unit of a factor of production.

Perfect Competitor

A market structure where many firms sell identical products, allowing no single company to influence the market price.