Which of the Following Statements Is CORRECT

question 34

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.

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Definitions:

Reinforcement

In behavioral psychology, a process by which a behavior is encouraged or strengthened through the administration of a stimulus or reward following the desired behavior.

Psychoanalytic Theories

A set of theories originated by Sigmund Freud that emphasize the influence of the unconscious mind on behavior.

Early-Childhood Experiences

Events, interactions, and a range of stimuli in the first few years of life that significantly influence an individual's developmental trajectory and personality formation.

Cognitive Theorist

A scholar or researcher who studies the mental processes involved in perception, memory, judgment, and decision making.