Which of the Following Statements Is CORRECT, Assuming Positive Interest

question 94

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 less than its effective annual rate.
• E) If an investment pays 10% interest, compounded annually, its effective annual rate will be less than 10%.

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Definitions:

Unconditional Positive Regard

A concept in humanistic psychology emphasizing the acceptance and support of a person regardless of what they say or do, originally introduced by Carl Rogers.

Client-Centered Therapy

A form of psychotherapy developed by Carl Rogers, focusing on providing a supportive environment that encourages self-discovery and self-acceptance.

Aversive Conditioning

A behavioral training method where undesirable behaviors are associated with unpleasant stimuli to reduce the behaviors.

Prefrontal Lobotomy

The severing or destruction of a section of the frontal lobe of the brain.