A Bank Pays a Quoted Annual (Nominal)interest Rate of 8

question 33

Multiple Choice

A bank pays a quoted annual (nominal) interest rate of 8%.However,it pays interest (compounded) daily using a 365-day year.What is the effective annual rate of return?

• A) 7.86%
• B) 7.54%
• C) 8.57%
• D) 8.33%
• E) 9.21%

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Definitions:

Privilege

The advantages or rights that are available to a particular person or group of people which are not afforded to others.

Racial Formation

A socio-historical process by which racial categories are created, inhabited, transformed, and destroyed.

Whiteness

A social and political construct that gives individuals perceived as white certain privileges and advantages.

Meritocracy

A system in which advancement is based on individual ability or achievement, rather than on class privilege or wealth.