Use the Table for the Question(s) Below -A 12% APR with Bi-Monthly Compounding Is Equivalent to an Structure

question 35

Multiple Choice

Use the table for the question(s) below.
Suppose the term structure of interest rates is shown below:
$\begin{array} { l c c c c c c } \hline \text { Term } & \text { 1 year } & \text { 2 years } & \text { 3 years } & \text { 5 years } & \text { 10 years } & \text { 20 years } \\\hline \text { Rate } & & & & & & \\( \text { EAR\%) } & 5.00 \% & 4.80 \% & 4.60 \% & 4.50 \% & 4.25 \% & 4.15 \% \\\hline\end{array}$
-A 12% APR with bi-monthly compounding is equivalent to an EAR of

• A) 12.50%.
• B) 12.00%.
• C) 11.98%.
• D) 12.62%.

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Definitions:

Stratum Lucidum

A thin, clear layer of dead skin cells in the epidermis found only in areas of thick skin, like the palms and soles.

Melanocyte

A cell located in the bottom layer of the skin's epidermis and in the eye, responsible for producing melanin, the pigment that colors the skin, hair, and eyes.

Epidermis

The outermost layer of the skin, consisting of keratinized, stratified squamous epithelium that functions as a barrier against environmental damages.

Sebaceous Gland

A small oil-producing gland present in the skin of mammals which secretes a lubricating oily matter (sebum) into the hair follicles to lubricate the skin and hair.