Identify the Correct Expression for the Effective Annual Rate (EAR)

question 23

Multiple Choice

Identify the correct expression for the effective annual rate (EAR) . 

• A)(1 + Periodic rate of interest)Number of borrowing (interest) periods in one year - 1
• B)(1 / Periodic rate of interest)Number of borrowing (interest) periods in one year - 1
• C)(1 - Periodic rate of interest)Number of borrowing (interest) periods in one year - 1
• D)(1 + Periodic rate of interest)Number of borrowing (interest) periods in one year + 1
• E)(1 - Periodic rate of interest)Number of borrowing (interest) periods in one year + 1

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Definitions:

Own Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, ceteris paribus.

Market Demand

The total quantity of a product or service that all consumers in a market are willing and able to purchase at different prices, over a specified period of time.

Affirmative Defense

A response to a plaintiff’s claim that does not deny the plaintiff’s facts but attacks the plaintiff’s legal right to bring an action. An example is the running of the statute of limitations.

Default Judgement

Default Judgement is a binding judgment in favor of either party based on some failure to take action by the other party, most often the failure to respond to a court summons.