The Effective Annual Rate (EAR)for a Savings Account with a Stated

question 39

Multiple Choice

The effective annual rate (EAR) for a savings account with a stated APR of 4% compounded daily is closest to:

• A)4.00%
• B)4.10%
• C)4.08%
• D)4.06%
• E)4.05%

Identify the conditions under which a CPA can be held liable for negligence, fraud, and scienter.

Distinguish between different legal doctrines and rules (e.g., Ultramares rule, Restatement (Second) of Torts) that affect accountant liability.

Recognize the role of privity of contract and the impact of third-party users on accountant's liability.

Understand the implications of securities laws (e.g., Securities Act of 1933, Securities Exchange Act of 1934) on accountants' responsibilities and liabilities.

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Definitions:

Total Utility

The overall satisfaction or benefit a consumer receives from consuming a certain quantity of a good or service.

Marginal Utility

The additional satisfaction or benefit gained from consuming one more unit of a good or service.

Money Income

The total amount of monetary earnings or receipts a person or household receives within a specific period.

Utility-Maximizing

The behavior or principle where individuals or entities choose options that increase their satisfaction or utility to the greatest extent.