CFA Practice Question

There are 410 practice questions for this study session.

CFA Practice Question

You have $500 that you would like to invest. You have two choices: Savings Account A, which earns 8% compounded annually, or Savings Account B, which earns 7.75% compounded semi-annually. Which would you choose and why?
A. You would choose A because it has a higher effective annual rate.
B. You would choose B because it has a higher effective annual rate.
C. You would choose B because it has the higher quoted rate.

User Contributed Comments 3

User Comment
azramirza A=540
b=539.5
poomie83 500 x (1+(.0775/2))^2 = 539.5
izzarivera To compute the EAR using BA II Plus
2nd 2, Nom=I enter,down arrow twice C/Y = N
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