Which of the Following Is NOT a True Statement

question 273

Multiple Choice

Which of the following is NOT a true statement?

• A) Present values and discount rates move in the opposite directions from one another.
• B) On monthly compounded loans, the EAR will exceed the APR.
• C) Compounding essentially means earning interest on interest.
• D) Future values increase with increases in interest rates.
• E) All else the same, the longer the term of a loan the lower will be the total interest you pay on it.

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Definitions:

T-statistic

A ratio of the departure of an estimated parameter from its notional value and its standard error.

Directional Hypothesis

A hypothesis that specifies the direction of the expected difference or relationship between variables.

Null Hypothesis

A default statement that indicates no effect or no difference, used as a starting point for statistical hypothesis testing.

Directional Hypothesis

A hypothesis that outlines the anticipated direction of the difference or relationship.