Everything Else Equal, Which of the Following Conditions Will Result

question 50

Multiple Choice

Everything else equal, which of the following conditions will result in the lowest present value of an amount to be received in the future?

• A)annual compounding
• B)quarterly compounding
• C)monthly compounding
• D)daily compounding

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Definitions:

Two-Tailed

Pertains to a test of significance where the critical area of a distribution is two-sided and tests whether a sample is either greater than or less than a certain range of values.

Degrees Of Freedom

The number of values in a statistical calculation that are free to vary without violating the constraints of the calculation.

Critical Values

Specific points on the scale of a test statistic beyond which the null hypothesis is rejected in favor of the alternative hypothesis.

Two-Tailed

A hypothesis test that allows for the possibility of an effect in two directions, either less than or greater than a specified range.