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 less than its effective annual rate.
E. If an investment pays 10% interest, compounded annually, its effective annual rate will be less than 10%.
Answer: D
You might also like to view...
The most effective and easiest mode of delivering presentations in nearly all situations is
A) memorization. B) reading from a prepared script. C) speaking from an outline or notes. D) impromptu speaking. E) from a seated position.
______ describes a high degree of compatibility between employee and organizational values.
Fill in the blank(s) with the appropriate word(s).
What federal statute was enacted by the U.S. Congress to protect trade secrets?
A. the Sarbanes-Oxley Act B. the Lanham Act C. the Telecommunication Act D. the Economic Espionage Act
Chocolate Sundry LLC's members and managers are Devlin, Effie, and Flavia. After Devlin's relationship to the firm ends, Effie and Flavia agree to discontinue the business. This is
A. illegal. B. optional. C. required. D. wrongful.