Question
Suppose Bank One offered an APR of 10% with semi-annual compounding on a deposit, while Bank Two offered an APR of 9.90% with monthly compounding.
Suppose Bank One offered an APR of 10% with semi-annual compounding on a deposit, while Bank Two offered an APR of 9.90% with monthly compounding. Which would you prefer (all else equal)? Show this with the effective annual rates.
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen
14th edition
007745443X, 978-0073530727, 73530727, 978-0077454432
