Which of the Following Statements Is CORRECT,assuming Positive Interest Rates

question 32

Multiple Choice

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

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

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Definitions:

Negotiation Gap

The difference between the initial positions or demands of negotiating parties, which needs to be bridged to reach an agreement.

Conflict

A disagreement or dispute between parties resulting from opposing interests, values, or needs, which can occur at various levels of interaction.

Competitive

Having a strong desire to be more successful than others, often characterized by strategies aimed at winning or achieving superiority.

Cooperative

An organization or system operated and owned by a group of individuals for their mutual benefit, focusing on shared goals or interests.