One Bank Offers You 4% Interest Compounded Semiannually

question 14

Multiple Choice

One bank offers you 4% interest compounded semiannually.What would the equivalent rate be if interest were compounded quarterly?

• A) 3.98%
• B) 3.96%
• C) 3.92%
• D) 1.00%

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Definitions:

Insurance Contracts

Agreements between an insurance provider and an individual or entity, outlining the terms for coverage against specified risks in exchange for premiums.

Clause Ambiguity

A situation where a provision in a contract or document can be interpreted in more than one way, leading to uncertainties or disputes.

Self-Governing

The ability of a community, organization, or group to exercise control and make decisions independently from external authorities.

Professional Bodies

Organizations representing the interests of individuals in specific professions, often responsible for regulation and standards.