A brand with semi-annual interest payments,all else equal,would be priced _________ than one with annual interest payments.
A)higher
B)lower
C)the same
D)it is impossible to tell
E)either higher or the same

Question

Quizplus · Accepted Answer

A brand with semi-annual interest payments would be priced lower than one with annual interest payments because investors generally prefer brands that offer annual interest payments since they provide more consistent cash flows and are easier to compare to other investments. This preference for annual payments leads to a higher demand for brands with annual payments, which drives up their price relative to brands with semi-annual payments.

A Brand with Semi-Annual Interest Payments,all Else Equal,would Be Priced