Which of the Following Statements Is True

question 84

Multiple Choice

Which of the following statements is true?

• A)The process of discounting is the inverse of the process of compounding.
• B)Ending balances using simple interest are always greater than ending balances using compound interest at positive interest rates.
• C)The present value of an annuity due is always less than the present value of an equivalent ordinary annuity at positive interest rates.
• D)The future value of an annuity due is always less than the present value of an equivalent ordinary annuity at positive interest rates.

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Definitions:

Market Value

The current price at which an asset or service can be bought or sold in an open and competitive market.

Claims Of Creditors

Rights or entitlements that individuals or entities have to demand payment or other remedies from a debtor as per the legal agreements.

Forbearance

A creditor's agreement to temporarily postpone collection efforts or the enforcement of a debt obligation.

Legally Entitled

Having a legal right or claim to something under the law.