1.)

What investment accumulates more interest--15% compounded semiannually, or 14% compounded daily?

	a.	The 15% option earns one percentage point more than the 14% option over a year
	b.	The 15% option accumulates more over a year--EAR of 15.5% vs. the 14% option, with an EAR of 15.0%
	c.	They accumulate the same amount over a year
	d.	The 14% option earns an EAR of 15% and is better than the 15% option with an EAR of 15.9

2.)

Four mortgages:
	W	X	Y	Z
Borrow	1,000	1,000	1,000	1,000
Balloon payment	0	200	1,000	1,300

Which of the following is most correct?

	a.	Y is full amortization; X is negative amortization
	b.	W is zero amortization; Y is full amortization
	c.	X is partial amortization; Z is negative amortization
	d.	W is full amortization, X, Y and Z are all partial amortization