Your Bank Account Pays an 8% Nominal Rate of Interest

question 32

Multiple Choice

Your bank account pays an 8% nominal rate of interest.The interest is compounded quarterly.Which of the following statements is CORRECT?

• A) The periodic rate of interest is 8% and the effective rate of interest is also 8%.
• B) The periodic rate of interest is 2% and the effective rate of interest is 4%.
• C) The periodic rate of interest is 8% and the effective rate of interest is greater than 8%.
• D) The periodic rate of interest is 4% and the effective rate of interest is less than 8%.
• E) The periodic rate of interest is 2% and the effective rate of interest is greater than 8%.

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Definitions:

Charismatic Leadership

A leadership style characterized by an individual's ability to inspire and motivate followers through their charm, persuasiveness, and compelling vision.

Organizational Citizenship Behaviour

Voluntary actions performed by employees that contribute to the overall positive functioning and environment of an organization beyond their formal job requirements.

Follower Satisfaction

The level of happiness and contentment that followers or subordinates feel regarding their leadership's direction and actions.

Transactional Leadership

A leadership style focused on the exchange between leaders and followers, where achievement of specific tasks leads to rewards or punishments.