11-16.Which of the Following Is False

question 21

Multiple Choice

11-16.Which of the following is false?

• A) for a discounted security,an acceleration in prepayments increases the yield
• B) for a discounted security,a delay in prepayments reduces the yield
• C) for a premium security,an acceleration in prepayments increases the yield
• D) for a premium security,a delay in prepayments increases the yield e all are true except c

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Definitions:

Ordinary Annuities

A sequence of identical payments distributed at the conclusion of successive intervals during a predetermined duration.

Annuities Due

Annuities that require payment at the beginning of each period, as opposed to the end, used often in leases and loan repayments.

Time Periods

Distinct intervals of time used for financial analysis, planning, and accounting, can range from short-term to long-term durations.

Future Value

The estimated amount of money an investment is expected to be worth in the future, taking into account a specified rate of interest or growth.