# Calculating an​ EAR)

June 28, 2019
###### The data in the attahed table represent the rate of return of a certain company stock for 11​ months, compared with the rate of return of a certain index of 500 stocks. Both are in percent. What is the estimate of B0 and B1? What is the P value for the hypothesis test?
June 28, 2019

(Calculating an​ EAR)  Your grandmother asks for your help in choosing a certificate of deposit​ (CD) from a bank with a​ one-year maturity and a fixed interest rate. The first certificate of​ deposit, CD​ #1, pays 2.45 percent APR compounded daily​, while the second certificate of​ deposit, CD​ #2, pays 2.50 percent APR compounded semiannually. What is the effective annual rate​ (the EAR) of each​ CD, and which CD do you recommend to your​ grandmother?

If the first certificate of​ deposit, CD​ #1, pays 2.45 percent APR compounded daily​, the EAR for the deposit is ___%. ​(Round to two decimal​ places.)

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