As a Result of Compounding, the Effective Annual Rate on a Bank

question 139

True/False

As a result of compounding, the effective annual rate on a bank deposit (or a loan) is always equal to or less than the nominal rate on the deposit (or loan).

---

Definitions:

Over Controlled Behaviour

A behavior pattern characterized by excessive self-discipline, rigidity, and a reluctance to express emotions or relax.

Operant Conditioning

An idea developed by Burrhus F. Skinner (1904–1990), according to which it is the consequences of behaviour that are important. Some consequences encourage the repetition of the behaviour that produces them, while other consequences result in the opposite effect. See also classical conditioning.

Fear Conditioning

A behavioral paradigm in which organisms learn to predict aversive events, associating a neutral stimulus with an aversive event.

Cognitive Distortions

Thoughts about the self, world, or future that are distortions of the true state of affairs.