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Suppose you face an investment opportunity that earns 1.25% per month. a. What is the APR? b. What is the EAR? c. Suppose you face

Suppose you face an investment opportunity that earns 1.25% per month.

a. What is the APR?

b. What is the EAR?

c. Suppose you face a second investment opportunity that quotes a return of 16% per year, compounded annually. Which of the two investments is better? Briefly explain your reasoning.

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