Which of the Following Statements Is CORRECT,assuming Positive Interest Rates

question 54

Multiple Choice

Which of the following statements is CORRECT,assuming positive interest rates and holding other things constant?

• A) The present value of a 5-year,$250 annuity due will be lower than the PV of a similar ordinary annuity.
• B) A 30-year,$150,000 amortized mortgage will have larger monthly payments than an otherwise similar 20-year mortgage.
• C) A bank loan's nominal interest rate will always be equal to or less than its effective annual rate.
• D) If an investment pays 10% interest,compounded annually,its effective annual rate will be less than 10%.
• E) Banks A and B offer the same nominal annual rate of interest,but A pays interest quarterly and B pays semiannually.Deposits in Bank B will provide the higher future value if you leave your funds on deposit.

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Definitions:

Indulgent

A parenting style characterized by permissiveness and high levels of warmth and responsiveness, but low levels of discipline or expectations.

Authoritarian

Describes a governing or parenting style characterized by strict adherence to rules, high expectations, and minimal feedback or warmth towards subordinates or children.

Survival Goal

An objective focused on persevering life and meeting basic needs in both animals and humans.

Economic Goal

Objectives or desired outcomes that an economy or individual aims to achieve, often related to growth, stability, and sustainability.