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2 In a world characterized by rising interest rates, many financial institutions use a stepped yield GIC (Guaranteed Investment Certificate) to make investors think they
2 In a world characterized by rising interest rates, many financial institutions use a stepped yield GIC (Guaranteed Investment Certificate) to make investors think they are earning a higher rate of return than they actually are. In an example from a few years ago, the bank advertised the following yields: Yeart 2% Year 2 2.5% Year 3: 2.75% Year 4 3.5% Year 5: 8.5% What is the annually compounded rate of return from this investment? 01:57:51 Multiple Choice 3.82% 0 3.85% 2.75% 4.11%
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