Which of the Following Statements Is CORRECT

question 30

Multiple Choice

Which of the following statements is CORRECT?

• A) The present value of a 3-year,$150 annuity due will exceed the present value of a 3-year,$150 ordinary annuity.
• B) If a loan has a nominal annual rate of 8%,then the effective rate can never be greater than 8%.
• C) If a loan or investment has annual payments,then the effective,periodic,and nominal rates of interest will all be different.
• D) The proportion of the payment that goes toward interest on a fully amortized loan increases over time.
• E) An investment that has a nominal rate of 6% with semiannual payments will have an effective rate that is smaller than 6%.

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Definitions:

Innate Human Characteristic

Fundamental traits or qualities that are considered to be inherent in all humans from birth.

Impulse to Play

An innate tendency to engage in activities for enjoyment and recreation rather than for a serious or practical purpose.

Consistency

The quality of always acting or behaving in the same way, showing the same standards or principles.

Sociobiologists

Scientists who study the biological basis of social behavior across species, including humans, often focusing on evolutionary influences.