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In: Finance

When interest is compounded more than once a year, the effective annual rate (APR) is lower...

When interest is compounded more than once a year, the effective annual rate (APR) is lower than the quoted rate. true , false

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Expert Solution

Answer: False

When interest is compounded more than once a year, effective annual rate is higher than the quoted rate. This is because number of times interest earned is more and the investor gets a chance to earn interest on interest,


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