When comparing different investment opportunities (each with the same risk)with different interest rates reported in different ways you should
A)convert each interest rate to an annual nominal rate.
B)convert each interest rate to a monthly nominal rate.
C)convert each interest rate to an effective annual rate.
D)compare them by using the published annual rates.
E)convert each interest rate to an APR.

Question

Quizplus · Accepted Answer

Converting each interest rate to an effective annual rate allows for a standardized comparison of investment opportunities. This takes into account the compounding frequency of each investment and provides the true annual rate of return.

When Comparing Different Investment Opportunities (Each with the Same Risk)with