Which of the Following Statements Is Correct,assuming Positive Interest Rates

question 104

Multiple Choice

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

• A)A 5-year, $250 annuity due will have a lower present value than a similar ordinary annuity.
• B)A 30-year, $150,000 amortized mortgage will have larger monthly payments than an otherwise similar 20-year mortgage.
• C)A typical investment's nominal interest rate will always be equal to or less than its effective annual rate.
• D)If an investment pays 10% interest, compounded annually, its effective annual rate will be less than 10%.

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