Which of the Following Statements Is CORRECT

question 1

Multiple Choice

Which of the following statements is CORRECT?

• A) an investment that has a nominal rate of 6% with semiannual payments will have an effective rate that is smaller than 6%.
• B) the present value of a 3-year, $150 ordinary annuity will exceed the present value of a 3-year, $150 annuity due.
• C) if a loan has a nominal annual rate of 7%, then the effective rate will never be less than 7%.
• D) if a loan or investment has annual payments, then the effective, periodic, and nominal rates of interest will all be different.
• E) the proportion of the payment that goes toward interest on a fully amortized loan increases over time.

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Definitions:

Immaculate

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Neurotransmitters GABA

Gamma-Aminobutyric Acid (GABA) is an inhibitory neurotransmitter in the central nervous system that helps regulate nervous system excitability.

Serotonin

A neurotransmitter that has various functions, including regulating mood, appetite, and sleep; implicated in feelings of well-being and happiness.

Anxiety

A feeling of worry, nervousness, or unease about something with an uncertain outcome, often reflecting a temporary state or a chronic condition.