Which of the Following Statements Is CORRECT

question 33

Multiple Choice

Which of the following statements is CORRECT?

• A) The present value of a 3-year,$150 ordinary annuity will exceed the present value of a 3-year,$150 annuity due.
• B) If a loan has a nominal annual rate of 8%,then the effective rate will never be less 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:

Two-Way Tables

A type of table used in statistics to display data collected from two categorical variables.

Alternative Hypothesis

A statement in hypothesis testing that proposes there is a statistically significant difference or effect, in contrast to the null hypothesis.

Chi-square Test

A statistical assessment designed to ascertain whether a notable relationship exists between two variables of categorical nature.

Association

A relationship or connection between two or more variables, where changes in one variable may be related to changes in another, though not necessarily causally.