Bank a Offers a 2-Year Certificate of Deposit (CD)that Pays

Multiple Choice

Bank A offers a 2-year certificate of deposit (CD) that pays 10 percent compounded annually.Bank B offers a 2-year CD that is compounded semi-annually.The CDs have identical risk.What is the stated,or nominal,rate that Bank B would have to offer to make you indifferent between the two investments?

A) 9.67%
B) 9.76%
C) 9.83%
D) 9.87%
E) 9.93%