What Is the Effective Annual Rate (EAR)

question 77

Multiple Choice

What is the effective annual rate (EAR) ?

• A) the interest rate that would earn the same interest with annual compounding
• B) the discount rate for an n-year time interval, where n may be more than one year or less than or equal to one year (a fraction)
• C) the ratio of the number of the annual percentage rate to the number of compounding periods per year
• D) the cash flows from an investment over a one-year period divided by the number of times that interest is compounded during the year

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Definitions:

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A situation in which a person is required to choose between two conflicting moral principles, making it difficult to decide what is right.

Quandary Ethics

Quandary ethics deals with situations where moral obligations conflict or where it's difficult to determine the right course of action, leading to ethical dilemmas or quandaries.

Character Ethics

A branch of ethics focused on virtues and moral character as the foundation of ethical behavior, rather than rules or consequences.

Happiness Concern

The issue or focus on understanding what factors contribute to human happiness and well-being.