Which of the Following Statements Is CORRECT

question 30

Multiple Choice

Which of the following statements is CORRECT?

• A) The present value of a 3-year,$150 annuity due will exceed the present value of a 3-year,$150 ordinary annuity.
• B) If a loan has a nominal annual rate of 8%,then the effective rate can never be greater than 8%.
• C) If a loan or investment has annual payments,then the effective,periodic,and nominal rates of interest will all be different.
• D) The proportion of the payment that goes toward interest on a fully amortized loan increases over time.
• E) An investment that has a nominal rate of 6% with semiannual payments will have an effective rate that is smaller than 6%.

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Definitions:

Social Comparison Theory

A theory suggesting individuals determine their own social and personal worth based on how they stack up against others.

Persuade

The act of convincing someone to do something or to believe in something through reasoning, argumentation, or appeal.

Aggressively

Behaving or acting in a manner that is forceful, assertive, or with a strong intent to dominate or succeed.

Self-serving Bias

The common tendency to attribute one's successes to personal characteristics and failures to external factors.