Which of the following statements concerning the effective annual rate are correct? I. When making financial decisions, you should compare effective annual rates rather than annual percentage rates. II. The more frequently interest is compounded, the higher the effective annual rate. III. A quoted rate of 6 percent compounded continuously has a higher effective annual rate than if the rate were compounded daily. IV. When choosing which loan to accept, you should select the offer with the highest effective annual rate.

Select one:

a. I and IV only

b. I, II, III, and IV

c. I, II, and III only

d. I and II only

e. II, III, and IV only