Which one of the following statements is correct? Multiple Choice The EAR, rather than the APR, should be used to compare both investment and loan options. The APR on a monthly loan is equal to (1 + monthly interest rate)12. 1. The EAR is always greater than the APR. The APR is equal to the EAR for a loan that charges interest monthly The APR is the best measure of the actual rate you are paying on a loan. Which one of the following is a correct statement, all else held constant? Multiple Choice The present value is directly related to the interest rate. The present value is inversely related to the future value. The future value is inversely related to the period of time. The period of time is directly related to the interest rate. The future value is directly related to the interest rate. A coupon paying corportae bond is an example of what type of loan? Multiple Choice Perpetual loan Complex loan Interest only loan Amortized Loan Pure Discount loan Travis borrowed $10,000 four years ago at an annual interest rate of 7 percent. The loan term is six years. Since he borrowed the money, Travis has been making annual payments of $700 to the bank. Which type of loan does he have? Multiple Choice Pure discount Compound :- Amortized Complex Interest-only SAL You are comparing two annulties. Annulty A pays $100 at the end of each month for 10 years. Annuity B pays $100 at the beginning of each month for 10 years. The rate of return on both annuities is 8 percent. Which one of the following statements is correct given this information? Multiple Choice The future value of Annuity A is greater than the future value of Annuity B. The present value of Annuity A is equal to the present value of Annuity B. Annuity B will pay one more payment than Annuity A will, O Annuity A has a higher future value but a lower present value than Annuity B. O Annuity B has both a higher present value and a higher future value than Annuity A. 18 of 32 ::: Next >