Which of the Following Statements Is CORRECT

question 61

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 annuity due will exceed the present value of a 3-year, $150 ordinary annuity.
• C) If a loan has a nominal annual rate of 8%, then the effective rate can never be greater than 8%.
• 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:

Pregnant Women

Women who are in the period of gestation, carrying one or more offspring inside their uterus, a state requiring specialized health care and attention.

Class

A system of categorizing society based on economic status, wealth, education, and other social markers that can influence individuals' opportunities and interactions.

Economic Benefits

Advantages or gains of a financial nature derived from activities or situations such as employment, investment, or socio-economic policies.

Social Benefits

Advantages or positive effects that individuals or communities receive as a result of social policies, interactions, or structures, contributing to overall well-being.