Which of the Following Statements Is Correct,assuming Positive Interest Rates

question 104

Multiple Choice

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

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

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Definitions:

Foreign Policy

A government's strategy in dealing with other nations.

Liberties

The condition of experiencing freedom in society from overbearing limitations set by authorities on one's lifestyle, actions, or political opinions.

Anticommunist Crusade

A period of intense effort to eliminate communist influence in various spheres of life, often associated with the Cold War era.

American Loyalty

The sense of allegiance or fidelity to the United States, often highlighted during times of national crises or wars.