Which statement is true? Multiple Choice An annuity with payments at the beginning of each period is called an ordinary annuity.

Essentials Of Investments
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Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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Which statement is true?
Multiple Choice
An annuity with payments at the beginning of each period is called an ordinary annuity.
All else equal, an ordinary annuity is more valuable than an annuity due.
All else equal, an increase in the number of annuity payments decreases the present value and increases the future value of an annuity.
All else equal, an increase in the discount rate decreases the present value and increases the future value of an annuity.
All else equal, a decrease in the number of payments increases the future value of an annuity due.
Transcribed Image Text:Which statement is true? Multiple Choice An annuity with payments at the beginning of each period is called an ordinary annuity. All else equal, an ordinary annuity is more valuable than an annuity due. All else equal, an increase in the number of annuity payments decreases the present value and increases the future value of an annuity. All else equal, an increase in the discount rate decreases the present value and increases the future value of an annuity. All else equal, a decrease in the number of payments increases the future value of an annuity due.
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