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1. 1) The present value of a single future sum: A) increases as the number of discount periods increases. B) is generally larger than the

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1. 1) The present value of a single future sum: A) increases as the number of discount periods increases. B) is generally larger than the future sum. C) depends upon the number of discount periods. D) increases as the discount rate increases. 2. Which of the following statements is FALSE? A) Quarterly compounding has a higher annual percentage yield than monthly compounding, B) On monthly compounding loans, the annual percentage yield will be less than the nominal or quoted rate of interest. C) Compounding essentially means earning interest on interest on an initial balance. D) Perpetuities pay an equal payment forever. 3. All else constant, the future value of an investment will increase if. A) the investment involves more risk. B) the investment is compounded for fewer years. C) the investment is compounded at a higher interest rate. D) both B and C. 4. An increase in and will decrease present value. 5. I-City pays 8 percent simple interest on its saving accounts balances, whereas Red-City pays 8 percent interest compounded annually. If you made a RM 5,000 deposit in each bank, how much more money would you earn from your Red-City Bank Account at the end of 10 years

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