If a bank offers a stated annual interest rate of 3.98%, and compounds quarterly, what is the effective annual rate the bank is offering? A. 4.04%. B. 4.09%. C. 3.33% 2. If a bank quotes a stated annual interest rate of 89%with an effective annual rate of 6.05%, what compounding period does the bank use? A. Monthly. B. Quarterly C. Annual The interest rates on two competing credit cards are as follows: Card One = 8.99% stated annual rate Card Two = 9.06% effective annual rate If Card One compounds monthly, and Card Two compounds quarterly, what is the difference between the two effective interest rates? A. Card One exceeds Card Two by 0.07%. B. Card One exceeds Card Two by 0.31%. C. Card Two exceeds Card One by 0.31%. 4. Johns savings account pays him 3.25% stated annual rate, compounded quarterly. John is willing to invest Pound 1,000 today. Ignoring taxes, his profit in two years will be closest to: A. Pound 63. B, pound 65. C. Pound 67 A series of ten exist1000 cash flows occurring at the end of each of the next ten years is best described as a(n): A. perpetuity. B. annuity due. C. ordinary annuity. A security will make payments over the next three years of exist60, exist60, and exist1,060, and is currently priced at exist980. The yield compounded annually is closest to: A. 4.7% B. 5.9%. C. 6.8%