Which of the Following Statements Is CORRECT

question 30

Multiple Choice

Which of the following statements is CORRECT?

• A) The present value of a 3-year,$150 annuity due will exceed the present value of a 3-year,$150 ordinary annuity.
• B) If a loan has a nominal annual rate of 8%,then the effective rate can never be greater than 8%.
• C) If a loan or investment has annual payments,then the effective,periodic,and nominal rates of interest will all be different.
• D) The proportion of the payment that goes toward interest on a fully amortized loan increases over time.
• E) An investment that has a nominal rate of 6% with semiannual payments will have an effective rate that is smaller than 6%.

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Definitions:

Behavior Consequence

The outcome or result of an action, which can either reinforce the behavior or deter it in the future.

Reinforcement

A psychological principle involving the use of rewards or punishments to increase or decrease the likelihood of a particular behavior.

Aversive Event

An unpleasant or undesirable occurrence that can lead to changes in behavior or psychological state.

Social Learning Theory

A theory that suggests people learn new behaviors through observational learning of others' actions and consequences.