You Have a Choice Between Investing $10,000 in a CD

question 81

Essay

You have a choice between investing $10,000 in a CD that in six months will pay you $10,190 or investing $9,800 in a T-bill that in 182 days will return $10,000.Ignoring any opportunity cost between the two investments,which will give you the higher annualized return and what will the annualized return be?
(a)T-bill; 2 percent
(b)T-bill; 4.01 percent
(c)CD; 3.8 percent
(d)CD; 1.9 percent

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Definitions:

Shaping

An operant conditioning procedure in which reinforcers guide behavior toward closer and closer approximations of the desired behavior.

Reinforcers

Stimuli, events, or conditions that increase the likelihood of a behavior being repeated.

Reinforcement

In operant conditioning, any event that strengthens the behavior it follows.

Successive Approximations

A method of shaping behavior by rewarding actions that are progressively closer to the desired behavior.