Fin quiz chap 4

# Fin quiz chap 4 - Questi on 1 An annuity Selected Answer 10...

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Questi on 1 10 out of 10 points An annuity: Selected Answer:

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Question 2 10 out of 10 points The stated rate of interest is 10%. Which form of compounding will give the highest effective rate of interest? Selected Answer: Question 3 10 out of 10 points A perpetuity differs from an annuity because: Selected Answer: Question 4 0 out of 10 points Which one of the following statements concerning interest rates is correct? Selected Answer: Question 5 0 out of 10 points The interest rate expressed as if it were compounded once per year is called the _____ rate. Selected Answer: effective annual
Question 7 10 out of 10 points Which of the following statements concerning the effective annual rate are correct? (I) When making financial decisions, you should compare effective annual rates rather than annual percentage rates. (II) The more frequently interest is compounded, the higher the effective annual rate. (III) A quoted rate of 6% compounded continuously has a higher effective annual rate than if the rate were compounded daily.

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