Which One of the Following Statements Concerning Interest Rates Is

question 44

Multiple Choice

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

• A)The stated rate is the same as the effective annual rate.
• B)Banks are most apt to prefer more frequent compounding on their savings accounts.
• C)The annual percentage rate increases as the number of compounding periods per year increases.
• D)An effective annual rate is the rate that applies if interest were charged annually.
• E)For any positive rate of interest,the effective annual rate will always exceed the annual percentage rate.

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Definitions:

Compromising

A conflict resolution strategy where each party gives up something of value to reach an agreement.

Closure and Implementation

The process of concluding tasks or projects and putting decided plans or policies into action.

Closing and Implementing

The final phase in a project or plan where actions are concluded and the strategies or policies are put into operation.

Loaded Question

A question that contains a controversial or unjustified assumption, often making it difficult to answer directly without implying something unintended.