Which One of the Following Statements Concerning Interest Rates Is

question 76

Multiple Choice

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

• A)Savers would prefer annual compounding over monthly compounding.
• B)The effective annual rate decreases as the number of compounding periods per year increases.
• C)The effective annual rate equals the annual percentage rate when interest is compounded annually.
• D)Borrowers would prefer monthly compounding over annual compounding.
• E)For any positive rate of interest, the effective annual rate will always exceed the annual percentage rate.

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