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Q-12. A money manager has $2,000,000 to invest for one year. She has identified two alternative one-year certificates of deposit (CD) shown below: Compounding frequency

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Q-12. A money manager has $2,000,000 to invest for one year. She has identified two alternative one-year certificates of deposit (CD) shown below: Compounding frequency Annual interest rate CD1 Quarterly 6.00% CD2 Continuously 8.00% Which CD has the highest effective annual rate (EAR) and how much interest will it earn? Highest EAR Interest earned CD1 $122,727.1 CD2 $166,574.1 A. B. C. CD2 $164,864.3

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