Determine which investment has the highest effective return

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Question 1: Determine Which of the following investments has the highest effective return (EAR)? (Assume that all CDs are of equal risk.)

Option 1) A bank CD with 9.8% APR and daily compounding (on a 365-day basis)

Option 2) A bank CD with 10% APR and quarterly compounding

Option 3) A bank CD with 10% APR and monthly compounding

Option 4) A bank CD with 10.2% APR and annual compounding

Reference no: EM132481108

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