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Which one of the following investments provides the highesteffective annual rate of return (i.e., which of the followinginvestments is the BEST = the largest EAR) over an investmenthorizon of 10 years)?a. An investment which has a 3.0 percent nominal rate withannual compounding.b. An investment which has a 2.98 percent nominal rate withsemi-annual compounding.c. An investment which has a 2.965 percent nominal rate withquarterly compounding.d. An investment which has a 2.9575 percent nominal rate withmonthly compounding.e. An investment which has a 2.955 percent nominal rate anddaily (365) compounding.
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