Which One of the Following Statements Concerning Interest Rates Is

question 53

Multiple Choice

Which one of the following statements concerning interest rates is correct?

• A)The stated rate is the same as the effective annual rate.
• B)An effective annual rate is the rate that applies if interest were charged annually.
• C)The annual percentage rate increases as the number of compounding periods per year increases.
• D)Banks prefer more frequent compounding on their savings accounts.
• E)For any positive rate of interest, the effective annual rate will always exceed the annual percentage rate.

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