Which of the Following Accounts Has the Highest EAR

question 41

Multiple Choice

Which of the following accounts has the highest EAR?

• A)one that pays 6.1% every six months
• B)one that pays 1.0% per month
• C)one that pays 12.6% per year
• D)one that pays 3% every three months

---

Definitions:

Small Firms

Companies with a smaller market capitalization, often characterized by higher potential growth and higher risk.

Large Firms

Companies that have a significant market capitalization, often characterized by a large amount of assets, revenues, and employees.

Risk Premium

The additional return expected from an investment for taking on a higher level of risk.

Holding Period

Refers to the duration of time an investment is held by an investor, impacting the tax treatment of any capital gains.