A deposit account pays 10% per annum with continuous compounding. Consider the following statements. I. The equivalent semi-annually compounded annualized interest rate is 10.2542%. II. The interest paid at the end of the f 3 months on an initial investment of $1,000,000 in the deposit account is $51,271 (rounded to the nearest dollar) Whi of the following is correct? Question 9Answer a. Statement I is correct, Statement II is incorrect. b. Both statements a correct. c. Both statements are incorrect. d. Statement I is incorrect, Statement II is correct.
A deposit account pays 10% per annum with continuous compounding. Consider the following statements. I. The equivalent semi-annually compounded annualized interest rate is 10.2542%. II. The interest paid at the end of the f 3 months on an initial investment of $1,000,000 in the deposit account is $51,271 (rounded to the nearest dollar) Whi of the following is correct? Question 9Answer a. Statement I is correct, Statement II is incorrect. b. Both statements a correct. c. Both statements are incorrect. d. Statement I is incorrect, Statement II is correct.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:A deposit account pays 10% per annum with continuous compounding. Consider the following statements. I. The
equivalent semi-annually compounded annualized interest rate is 10.2542%. II. The interest paid at the end of the first
3 months on an initial investment of $1,000,000 in the deposit account is $51,271 (rounded to the nearest dollar) Which
of the following is correct? Question 9Answer a. Statement I is correct, Statement II is incorrect. b. Both statements are
correct. c. Both statements are incorrect. d. Statement I is incorrect, Statement II is correct.
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