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With More Frequent Than Annual Compounding,the Effective Annual Rate Is

Question 7

Multiple Choice

With more frequent than annual compounding,the effective annual rate is ______________ than the nominal rate,due to the effect of ______________.


A) lower,rounding differences
B) lower,not earning "interest on interest"
C) higher,rounding differences
D) higher,earning "interest on interest"

Correct Answer:

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