Bank A is offering 5.8% compounded quarterly while bank B is offering 5.9% compounded semi-annually. Which of the following statements is true?

Question

Bank A is offering 5.8% compounded quarterly while bank B is offering 5.9% compounded semi-annually.  Which of the following statements is true?

Answer

A is higher with an EAR of 6.00%

Answer

B is higher with an EAR of 6.05%

Answer

A is higher with an EAR of 5.93%.

Answer

B is higher with an EAR of 5.99%

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