Which of the Following Statements Is FALSE

question 30

Multiple Choice

Which of the following statements is FALSE?

• A) The effective annual rate indicates the amount of interest that will be earned at the end of one year.
• B) The annual percentage rate indicates the amount of simple interest earned in one year.
• C) The annual percentage rate indicates the amount of interest including the effect of compounding.
• D) Because interest rates may be quoted for different time intervals, it is often necessary to adjust the interest rate to a time period that matches that of our cash flows.

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