1. Define and explain contingent liability, risk free rate, risk premium, credit rating, present value, time value of money, and annuity.
2. Your bank account pays interest with an EAR of 5 %5%. What is the APR quote for this account based on semiannual? compounding? What is the APR with monthly? compounding?? (Note: Be careful not to round any intermediate steps less than six decimal? places.)