If a Bank Pays a 4

question 77

Multiple Choice

If a bank pays a 4.50% nominal rate,with monthly compounding on deposits,what effective annual rate (EFF%) does the bank pay?

• A)3.35%
• B)3.72%
• C)4.13%
• D)4.59%

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Definitions:

Neuroticism

A personality trait associated with experiencing negative emotions more frequently and intensely than average, including anxiety, depression, and irritability.

Impulsivity

A tendency to act on a whim, displaying behavior characterized by little or no forethought, reflection, or consideration of the consequences.

Alcohol Myopia

A cognitive condition induced by alcohol consumption, characterized by a narrowed focus of attention and impaired judgment.

Intoxicated

A state of being under the influence of substances, such as alcohol or drugs, leading to altered mood, cognition, and motor function.