Your Bank Account Pays an 8% Nominal Rate of Interest

question 83

Multiple Choice

Your bank account pays an 8% nominal rate of interest. The interest is compounded quarterly. Which of the following statements is CORRECT?

• A) the periodic rate of interest is 8% and the effective rate of interest is also 8%.
• B) the periodic rate of interest is 2% and the effective rate of interest is 4%.
• C) the periodic rate of interest is 8% and the effective rate of interest is greater than 8%.
• D) the periodic rate of interest is 4% and the effective rate of interest is less than 8%.
• E) the periodic rate of interest is 2% and the effective rate of interest is greater than 8%.

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Definitions:

Burnout Stages

Phases of chronic workplace stress that are characterized by exhaustion, cynicism, and feelings of reduced professional efficacy.

Self-Efficacy

Confidence to take on and put in the necessary effort to succeed at challenging tasks.

Cynicism

A skeptical attitude or feeling of distrust toward the motives of others or the effectiveness of institutions.

Negative Affectivity

A personality trait characterized by the tendency to experience negative emotions and moods, such as anger, sadness, or guilt, more frequently and intensely than others.