Which of the Following Statements Is Most Correct

question 47

Multiple Choice

Which of the following statements is most correct?

• A)There is an inverse relation between the present value interest factor of an annuity and the future value interest factor of an annuity, i.e., one is the reciprocal of the other.
• B)The future value of an ordinary annuity can be determined as the product of the annual payment and the appropriate future value interest factor for an ordinary annuity.
• C)If a bank uses daily compounding for a savings account, the nominal rate (or APR) will be greater than the effective annual rate.
• D)Each of the above statements is equally true.

---

Definitions:

Positive Reinforcement

A behavior modification method in psychology that involves rewarding desirable behaviors to increase the likelihood of their recurrence.

Punishment

A method used to reduce the occurrence of an undesirable behavior by applying an adverse stimulus or removing a positive stimulus.

Long Run

A period of time sufficient for all variables within an economic model or business scenario to be adjusted, not confined by fixed constraints.

Effective

Being successful in producing a desired or intended result.