Which of the Following Statements Is CORRECT, Assuming Positive Interest

question 111

Multiple Choice

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

• A) 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.
• B) The present value of a 5-year, $250 annuity due will be lower than the PV of a similar ordinary annuity.
• C) A 30-year, $150,000 amortized mortgage will have larger monthly payments than an otherwise similar 20-year mortgage.
• D) A bank loan's nominal interest rate will always be equal to or greater than its effective annual rate.
• E) If an investment pays 10% interest, compounded quarterly, its effective annual rate will be greater than 10%.

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Definitions:

Assertiveness

The quality of being self-assured and confident without being aggressive, allowing individuals to express themselves effectively and stand up for their personal rights.

Projective Techniques

Psychological assessment tools that use ambiguous stimuli to elicit responses that are thought to reveal hidden aspects of an individual's personality.

Personal Needs

Basic requirements for individual well-being, such as food, water, safety, as well as psychological longings like love, esteem, and self-actualization.

Ambiguous Stimulus

A sensory input that lacks clear, definitive features, making its interpretation subject to individual perception or context.