What Is the Effective Annual Rate (EAR)

question 104

Multiple Choice

What is the effective annual rate (EAR) ?

• A)the interest rate that would earn the same interest with annual compounding
• B)the ratio of the number of the annual percentage rate to the number of compounding periods per year
• C)the discount rate for an n-year time interval,where n may be more than one year or less than or equal to one year (a fraction)
• D)the cash flows from an investment over a one-year period divided by the number of times that interest is compounded during the year

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Definitions:

Economic System

The structure and methods a society uses to produce, distribute, and consume goods and services.

Adultery

Engaging in sexual relations with someone other than one's spouse, considered a breach of marital fidelity.

Adultery

Voluntary sexual relations between an individual who is married and someone who is not their spouse, often considered a breach of trust in a marriage.

Teenage Sex

Sexual activities involving teenagers, which can encompass a range of behaviors from exploration to consensual intercourse, often discussed in the context of education and health.