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%.

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Definitions:

Old World Monkey

A group of primates native to Africa and Asia, part of the family Cercopithecidae, distinct for their tails and cheek pouches.

Savannahs

Grassland ecosystems with sparse tree coverage, typically found in tropical and subtropical regions.

Baboons

A genus of large, terrestrial monkeys known for their complex societies and behaviors, native to Africa and Arabia.

Opposability

Opposability refers to the ability of the thumb to touch the other fingers across the palm, allowing for a greater range of motion and dexterity, a key feature in human hand evolution.