Which of the Following Statements Is CORRECT

question 64

Multiple Choice

Which of the following statements is CORRECT?

• A) An investment that has a nominal rate of 6% with semiannual payments will have an effective rate that is smaller than 6%.
• B) The present value of a 3-year, $150 ordinary annuity will exceed the present value of a 3-year, $150 annuity due.
• C) If a loan has a nominal annual rate of 7%, then the effective rate will never be less than 7%.
• D) If a loan or investment has annual payments, then the effective, periodic, and nominal rates of interest will all be different.
• E) The proportion of the payment that goes toward interest on a fully amortized loan increases over time.

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Definitions:

Advantages

Favorable factors or benefits that give a product, service, or business a competitive edge over others in the market.

Disadvantages

These are the negative aspects or shortcomings associated with a particular decision, strategy, or product.

Internal Marketing

The practice of using an organization's internal communication to effectively engage and motivate employees to serve customers better.

Marketing Implementation

The process that turns marketing strategies and plans into marketing actions in order to accomplish strategic marketing objectives.