With More Frequent Than Annual Compounding,the Effective Annual Rate Is

question 11

Multiple Choice

With more frequent than annual compounding,the effective annual rate is ______________ than the nominal rate,due to the effect of ______________.

• A)lower,rounding differences
• B)lower,not earning "interest on interest"
• C)higher,rounding differences
• D)higher,earning "interest on interest"

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Definitions:

Directors

Members of a board elected or appointed to govern the affairs of a corporation or organization.

Meeting

A gathering of individuals or representatives for the purpose of discussing and acting upon matters of common interest.

Incorporators

Individuals who sign the articles of incorporation for a corporation, effectively bringing it into existence under the law.

Corporate Articles

Legal documents filed with a state government to formally establish the existence of a corporation.