Which of the Following Statements Is Correct

question 119

Multiple Choice

Which of the following statements is correct?

• A) Simple rates can't be used in present value or future value calculations because they fail to account for compounding effects.
• B) The periodic interest rate can be used directly in calculations as long as the number of payments per year is greater than or equal to the number of compounding periods per year.
• C) In all cases where interest is added or payments are made more frequently than annually,the periodic rate is less than the annual rate.
• D) Generally,the APR is greater than the EAR as a result of compounding effects.
• E) If the compounding period is semiannual then the periodic rate will equal the effective annual rate divided by two.

Identify the conditions under which firms can gain from price discrimination.

Recognize the characteristics of competitive price-searcher markets and their differences from price-taker markets.

Analyze the effects of market competition on product variety, price, and profitability.

Comprehend the role of elasticity of demand in setting prices for different consumer groups.

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Definitions:

Treasurer

An officer of a company or organization responsible for managing financial risks, investments, and treasury operations.

Expected Profit

The forecasted gain or loss from a business venture or investment, calculated by multiplying the potential outcomes by their probabilities.

Liabilities

Liabilities are financial obligations or debts that a business has to pay back in the future, such as loans, accounts payable, and mortgages.

Assets

Refers to resources owned by a company or individual that have economic value and can provide future benefits.