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Listen A life insurance company pays investors 5% compounded annually on its five-year GICs. For you to be indifferent as to which compounding option
Listen A life insurance company pays investors 5% compounded annually on its five-year GICs. For you to be indifferent as to which compounding option you choose, what would the nominal rates have to be on GICs with: a) Semiannual compounding? b) Quarterly compounding? c) Monthly compounding? Calculate interest rates accurate to the nearest 0.01%.
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