Everything else equal, the greater the number of compounding periods per year, the greater the effective rate of return that is earned on an investment.
Answer the following statement true (T) or false (F)
True
If interest is computed once each year—that is, compounded annually—effective annual rate is equal to annual percentage rate, which is equal to simple interest rate. Everything else equal, the greater the number of compounding periods per year, the greater the effective rate of return that is earned on an investment. See 4-5: Annual Percentage Rate (APR) and Effective Annual Rate (EAR)
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