Which One of the Following Statements Is TRUE About the Effective

question 66

Multiple Choice

Which one of the following statements is TRUE about the effective annual rate (EAR) ?

• A) The effective annual interest rate (EAR) is defined as the annual growth rate that takes compounding into account.
• B) The EAR conversion formula accounts for the number of compounding periods and, thus, effectively adjusts the annualised interest rate for the time value of money.
• C) The EAR is the true cost of borrowing and lending.
• D) All of the above are true.

---

Definitions:

Sea Slug Aplysia

A marine gastropod used extensively in research for understanding the neurological basis of learning and memory.

Memories

Stored information in the brain resulting from learning and experience, influencing behavior and decision-making.

Synapses

Junctions where neurons communicate with each other or with other types of cells, allowing for the transmission of electrical or chemical signals across the nervous system.

Vertebrate Brain

The central nervous system component of vertebrates, including humans, responsible for processing sensory information and coordinating behavior.