1. Which of the following securities present a better investment? Assume that the investment amount is flexible and you may choose to purchase more than one of each security. A. A security that costs you $1000/contract now and will give you $2800/contract back in 10 years B. An investment account that pays 10% annual interest 2. Edward took out a loan of $5,000 today at monthly interest rate of 1.25%. If he pays off this loan with one single payment in 5 years, what is the dollar amount of interest he needs to pay then? A. $5,536 B. $9,196 C. $10,536 D. $14,196 Short-answer question (2 questions, 0.5 points/question, total 1 points) 1. How would the present value of a single future sum change in response to each of the following changes: a) a higher interest rate is used b) the future amount is further into the future 2. What is the difference between compound interest and simple interest