Which of the Following Will Increase the Present Value of an Annuity,all

question 122

Multiple Choice

Which of the following will increase the present value of an annuity,all else held constant?
I.Increase in the number of payments
II.Increase in the interest rate
III.Decrease in the interest rate
IV.Decrease in the payment amount

• A)I and II only
• B)I and III only
• C)II and IV only
• D)I, II, and IV only
• E)I, III, and IV only

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Definitions:

Binomial Proportions

The probabilities of outcomes for a binomial distribution, which describes the number of successes in a fixed number of binary experiments.

Two-tail Test

A statistical hypothesis test in which the area of interest, or rejection region, is in both tails of the probability distribution, used to determine if there is a significant difference in either direction.

Z-test

A statistical test used to determine if there is a significant difference between sample and population means under the assumption of a normal distribution.

Chi-square Goodness-of-fit

A statistical test to determine how well observed data fit an expected distribution, generally used for categorical data.