Which of the Following Statements Is True About the Effective

question 98

Multiple Choice

Which 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 rates that do not take compounding into account.
• B) The EAR is the annualized interest rate using simple interest. It ignores the interest earned on interest associated with compounding periods of less than one year.
• C) The EAR is the simple interest charged per period multiplied by the number of periods per year.
• D) The EAR is the interest rate actually paid (or earned) after accounting for compounding.

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Definitions:

Lost Productivity

The reduction in work output or efficiency, often due to various hindrances or inefficiencies.

Organizational Competitiveness

The ability of an organization to develop and maintain an edge over its competitors through strategies that attract and retain customers, improve quality, and enhance innovation.

Productivity

The efficiency with which inputs are converted into outputs, often measured in terms of work output per unit of time.

Technology Utilization

The effective use of technology as a tool to improve processes, productivity, or services in various domains.