You Are Offered an Investment That Pays 8% APR Compounded

question 62

Multiple Choice

You are offered an investment that pays 8% APR compounded continuously.The effective annual rate for this investment is closest to:

• A)7.70%.
• B)8.00%.
• C)8.33%.
• D)8.50%.

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Definitions:

Predictive Validities

The extent to which a score on a scale or test predicts future performance on a related task.

Construct Validity

The extent to which a test or measure accurately assesses the theoretical concept it is intended to measure.

Measurement Errors

The difference between a measured value and the true or accepted value, arising from limitations in the measurement process.

Strong Situation

A situation that elicits similar behaviors from most people, minimizing individual differences in response.