If the Compound Period Is Greater Than One

question 32

Multiple Choice

If the compound period is greater than one:

• A) the effective annual interest rate is always equal to the annual percentage rate.
• B) the effective annual interest rate is always less than the annual percentage rate.
• C) the effective annual interest rate is always greater than the annual percentage rate.
• D) the effective annual interest rate is never greater than the annual percentage rate.

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