Question: 1 . You received some advertisement material in your mail from a local bank. The bank ers you a loan of $ 1 0 0

1. You received some advertisement material in your mail from a local bank. The bank
ers you a loan of
$100,000 with an APR of 5%. However, the compounding frequency is not specified. Which of the following
is true?
A. The EAR is at least 5%.
B. The EAR cannot be higher than 5%.
C. The EAR can be both lower or higher than 5%.
D. The EAR must be the same as APR.
E. None of the above.

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