Business, 05.11.2019 05:31 vickye146

Which of the following statements is correct? a. an investment that has a nominal rate of 6% with semiannual payments will have an effective rate that is smaller than 6%.b. the present value of a 3-year, $150 ordinary annuity will exceed the present value of a 3-year, $150 annuity due. c. if a loan has a nominal annual rate of 7%, then the effective rate will never be less than 7%.d. if a loan or investment has annual payments, then the effective, periodic, and nominal rates of interest will all be different. e. the proportion of the payment that goes toward interest on a fully amortized loan increases over time.

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Answer from: jeffcarpenter

c. If a loan has a nominal annual rate of 7%, then the effective rate will never be less than 7%

CORRECT

as at least is recive 7% of the investment. If payment are made in shorter period (semiannually, quarterly, etc)

Then the effective rate will be higher, not lower.

Explanation:

a. An investment that has a nominal rate of 6% with semiannual payments will have an effective rate that is smaller than 6%

FALSE the effective rate will be higher as there is compounding effect.

b. The present value of a 3-year, $150 ordinary annuity will exceed the present value of a 3-year, $150 annuity due

FALSE the annuity-due is discounted for one period less, as the payment are made at the beginning of the period therefore; his V is greater.

d. If a loan or investment has annual payments, then the effective, periodic, and nominal rates of interest will all be different

FALSE if it mades annual payments they will be equal

e. The proportion of the payment that goes toward interest on a fully amortized loan increases over time.

FALSE the interest will decrease over time as there is a portion of principal which is being paid each installment

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Competitive intelligence activities occur so that a company can use information about a competitor's new products to develop superior marketing strategies for its own products. when talking about competitive intelligence, an easy way to remember these terms are to know your enemy. when having competitive intelligence it's allowing information you find out about other companies and how they run their company, the risks they have come in contact with and opportunities they haven't taken and figure out how to use them to your advantage. always be smarter than your competition.

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