You Are Deciding Among Several Different Bank Accounts

question 50

Multiple Choice

You are deciding among several different bank accounts. Which of the following will generate the highest effective annual rate (EAR) ?

• A) a 10 percent rate with monthly compounding
• B) a 10 percent rate with annual compounding
• C) a 10.5 percent rate with annual compounding
• D) a 10 percent rate with quarterly compounding

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Definitions:

Factor Analysis

A statistical technique designed to discover the fundamental factors or elements that account for the observed correlation patterns among a collection of variables.

Eta Analysis

A statistical method for measuring the association between qualitative and quantitative variables.

MANOVA

Multivariate Analysis of Variance, a statistical approach used to test the difference between group means on several dependent variables at once.

ANCOVA

Analysis of Covariance, a statistical technique used to adjust the effects of one or more quantitative independent variables while comparing the means of two or more groups.