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1. An annuity and an annuity due that have the same number of payments also have the same present value if r = 10%. Which one has the higher payment? A. The annuity has the higher payment B. The annuity due has the higher payment C. They both must have the same payment since the present values are the same D. There is no way to tell which has the higher раyment E. An annuity and an annuity due cannot have the same present value 2. Classify each of the following in terms of their effect on interest rates (increase or decrease): I. Perceived risk of financial securities increases II. Near term spending needs decrease II. Future profitability of real investments increases A. Iincreases, II increases, II increases B. Iincreases, Il decreases, III decreases C. I decreases, II increases, III increases D. I decreases, II decreases, III decreases E. None of the above

1. An annuity and an annuity due that have the same number of payments also have the same present value if r = 10%. Which one has the higher payment? A. The annuity has the higher payment B. The annuity due has the higher payment C. They both must have the same payment since the present values are the same D. There is no way to tell which has the higher раyment E. An annuity and an annuity due cannot have the same present value 2. Classify each of the following in terms of their effect on interest rates (increase or decrease): I. Perceived risk of financial securities increases II. Near term spending needs decrease II. Future profitability of real investments increases A. Iincreases, II increases, II increases B. Iincreases, Il decreases, III decreases C. I decreases, II increases, III increases D. I decreases, II decreases, III decreases E. None of the above

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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ANSWER NUMBER 2. BUT IF YOU KNOW, NUMBER 1, PLEASE ANSWER IT TOO 

1. An annuity and an annuity due that have the same number of payments also have the same present value if r = 10%. Which one has the higher payment? A. The annuity has the higher payment B. The annuity due has the higher payment C. They both must have the same payment since the present values are the same D. There is no way to tell which has the higher payment E. An annuity and an annuity due cannot have the same present value 2. Classify each of the following in terms of their effect on interest rates (increase or decrease): I. Perceived risk of financial securities increases II. Near term spending needs decrease III. Future profitability of real investments increases A. Iincreases, II increases, III increases B. Iincreases, II decreases, III decreases C. I decreases, II increases, III increases D. I decreases, II decreases, III decreases E. None of the above
Transcribed Image Text:1. An annuity and an annuity due that have the same number of payments also have the same present value if r = 10%. Which one has the higher payment? A. The annuity has the higher payment B. The annuity due has the higher payment C. They both must have the same payment since the present values are the same D. There is no way to tell which has the higher payment E. An annuity and an annuity due cannot have the same present value 2. Classify each of the following in terms of their effect on interest rates (increase or decrease): I. Perceived risk of financial securities increases II. Near term spending needs decrease III. Future profitability of real investments increases A. Iincreases, II increases, III increases B. Iincreases, II decreases, III decreases C. I decreases, II increases, III increases D. I decreases, II decreases, III decreases E. None of the above
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