Choose the Word or Phrase in [ ] Which Will

question 94

Short Answer

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
-Returns from annuities can be [significant | disappointing].

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Definitions:

Zero-Coupon Bond

A type of bond that does not pay periodic interest payments and is instead issued at a deep discount to its face value.

Implicit Interest

The cost of borrowing that is not explicitly stated as an interest rate, often factored into the terms of leases or other financial agreements.

Face Value

The nominal or dollar value printed on a security, such as a bond or stock, representing its legal worth.

Effective Annual Yield

The interest rate on an investment or loan, which is compounded more than once per year, represented as an annual rate.