Given a positive rate of return and multiple time periods, compound interest

• A. increases in an exponential manner.

• B. increases in a linear manner.

• C. produces the same future values as simple interest.

• D. provides future values that are less than those provided by simple interest.

• E. increases at a decreasing rate.

Differential growth refers to the stock of a firm that increases its dividend by

• A. three or more percent per year.

• B. a stated percent each year.

• C. a rate that is expected to be sustainable indefinitely.

• D. an amount in excess of $.25 per year.

• E. varying rates over a period of time.

Bonds issued by the U.S. government

• A. are considered to be default-free.

• B. are exempt from interest-rate risk.

• C. provide totally tax-free income.

• D. pay interest that is exempt from federal income tax.

• E. are taxed the same as municipal bonds.