Which One of the Following Statements Is Correct

question 258

Multiple Choice

Which one of the following statements is correct?

• A) The future value decreases as the period of time increases, all else constant.
• B) The future value of $100 invested at 6% simple interest increases at a constant rate as the period of time increases.
• C) There is an inverse relationship between the future value of a lump sum investment and the length of the investment period.
• D) The future value of $100 invested at 6%, compounded annually, increases over time in an exponential manner.
• E) Because time is the exponent in the future value formula, the length of an investment period has minimal effect on the future value of the investment.

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Definitions:

Population Groups

Distinct segments of individuals within a large community, categorized by certain shared characteristics.

Statistical Inferences

The process of drawing conclusions about a population's characteristics based on a subset of data taken from that population.

Self-Selected Samples

A sample in which the participants have volunteered themselves, which may lead to bias and unrepresentative samples.

Stratified Random Samples

A sampling method that involves dividing the population into subgroups (strata) and randomly selecting samples from each stratum, aiming to ensure representation of key subgroups.