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

question 32

Multiple Choice

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

• A) The present value of a 5-year,$250 annuity due will be lower than the PV of 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 bank loan's nominal interest rate will always be equal to or greater than its effective annual rate.
• D) If an investment pays 10% interest,compounded quarterly,its effective annual rate will be greater than 10%.
• E) 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.

---

Definitions:

Bad Choices

Decisions made that lead to negative consequences or outcomes, often considered unwise in hindsight.

Admit Their Guilt

The act of confessing to wrongdoing, especially in a legal context, where an individual acknowledges responsibility for a committed offense.

Guided Imagery

A relaxation technique that involves following verbal instructions to imagine a peaceful and calming scene or experience, often used in therapy.

Person-centered Therapy

A therapeutic approach developed by Carl Rogers, emphasizing an individual's capacity for self-direction and growth in a supportive environment.