Which of the Following Statements Is CORRECT, Assuming Positive Interest

question 111

Multiple Choice

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

• A) 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.
• B) The present value of a 5-year, $250 annuity due will be lower than the PV of a similar ordinary annuity.
• C) A 30-year, $150,000 amortized mortgage will have larger monthly payments than an otherwise similar 20-year mortgage.
• D) A bank loan's nominal interest rate will always be equal to or greater than its effective annual rate.
• E) If an investment pays 10% interest, compounded quarterly, its effective annual rate will be greater than 10%.

---

Definitions:

Consumer Behaviour

The analysis of the ways in which individuals, collectives, or organizations pick, purchase, apply, and dispose of goods, services, experiences, or notions to satisfy requirements, and the consequences these ways have on consumers and the social environment.

Process

A series of actions or steps taken in order to achieve a particular end.

Post Purchase Issue

A problem or dissatisfaction that a consumer experiences after buying and using a product or service.

Purchase Issue

Concerns or factors that influence the decision-making process during the acquisition of goods or services.