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:

Acetylcholine

A neurotransmitter in both the central and peripheral nervous systems involved in muscle activation, memory, and learning.

Agonist

A chemical or drug that binds to receptors in the brain and causes a reaction, often mimicking the action of naturally occurring substances.

Neuron

A cell of the nervous system responsible for receiving and transmitting information through electrical and chemical signals.

Axon

A long, slender projection of a nerve cell that transmits electrical impulses away from the neuron's cell body to other neurons, muscles, or glands.