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The Effective Annual Rate Is Defined as the Interest Rate

Question 12

Multiple Choice

The effective annual rate is defined as the interest rate that is:


A) compounded at regular intervals throughout the year
B) equal to a monthly rate multiplied by twelve
C) computed by multiplying the rate per period by the number of periods per year
D) expressed as if it were compounded once per year
E) compounded only once over a multi-year period

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