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Question
Bank A offers a 2-year certificate of deposit (CD) that pays 10 percent compounded annually. Bank B offers a 2-year CD that is compounded semi-annually. The CDs have identical risk. What is the stated, or simple, rate that Bank B would have to offer to make you indifferent between the two investments?
a. 9.67%
b. 9.76%
c. 9.83%
d. 9.87%
e. 9.93%
Answer
This answer is hidden. It contains 159 characters.
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