Which of the Following Statements Is Correct

question 60

Multiple Choice

Which of the following statements is correct?

• A)A 15-year mortgage will have larger monthly payments than a 30-year mortgage.
• B)If an account earns 3 percent per year compounded annually, then it also has an effective annual rate (EAR) of 3 percent.
• C)The present value of a $500 perpetuity is greater if the interest rate is higher.
• D)Statements a, b, and c are correct.
• E)Only statements a and b are correct.

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Definitions:

Solvency

The ability of a company to meet its long-term financial obligations and continue its operations in the long term.

Accounting Standards

Principles that guide and standardize accounting practices to ensure financial statements are prepared consistently and transparently.

Evidential Matter

Evidential matter comprises all the documents, confirmations, and information gathered by auditors to substantiate their opinion on the financial statements' fairness.

Analysis Overview

A summary or brief outline that highlights the key points and findings of a detailed analysis.