Which of the Following Statements Is CORRECT, Assuming Positive Interest

question 139

Multiple Choice

Which of the following statements is CORRECT, assuming positive interest rates and holding other things constant?

• A) Banks A and B offer the same nominal annual rate of interest, but A pays interest quarterly and B pays semiannually.Deposits in Bank B will provide the higher future value if you leave your funds on deposit.
• B) The present value of a 5-year, $250 annuity due will be lower than the PV of a similar ordinary annuity.
• C) A 30-year, $150, 000 amortized mortgage will have larger monthly payments than an otherwise similar 20-year mortgage.
• D) A bank loan's nominal interest rate will always be equal to or greater than its effective annual rate.
• E) If an investment pays 10% interest, compounded quarterly, its effective annual rate will be greater than 10%.

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Definitions:

Stereochemical

Pertains to the study of the three-dimensional arrangement of atoms within molecules and the impact of this arrangement on the physical and chemical properties of the molecules.

Regio-

A prefix indicating the region or position in a molecule where a reaction or specific structural change occurs.

Stereochemical

Regarding the arrangement of atoms in molecules and how it affects their characteristics and chemical reactions.

Reagents

Chemical substances or compounds added to a system to bring about a chemical reaction or to see if a reaction occurs.