Assume JP Morgan Has a Choice Between Two Deposit Accounts

question 111

Multiple Choice

Assume JP Morgan has a choice between two deposit accounts. Account A has an annual percentage rate of 7.55 percent but with interest compounded monthly. Account B has an annual percentage rate of 7.45 percent with interest compounded quarterly. Which account provides the highest effective annual return?

• A) Account A
• B) Account B
• C) Both provide the same effective annual return.
• D) We don't have sufficient information to make a choice.

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Definitions:

Absolute Advantage

The ability of an individual, company, or country to produce a good or service more efficiently than competitors using the same amount of resources.

Comparative Advantage

The ability of an individual, company, or country to produce a good or service at a lower opportunity cost than competitors.

Brazilian Worker

An individual employed in Brazil, facing economic, social, and labor market conditions unique to the country, including various labor laws and economic challenges.

Hot Dogs

A grilled or steamed sausage served in the slit of a partially sliced bun.