1.

Which of the following statements is/are true?

• A. All else equal, an ordinary annuity is more valuable than an annuity due.

• B. All else equal, a decrease in the number of payments decreases the future value of an annuity due.

• Both A and B are true.

• Neither A nor B are true.

2.

Which of the following statements is/are true?

• A. The annual percentage rate (APR) of interest and the effective annual rate (EAR) of interest can never be the same.

• B. Interest can only be compouded over any time period (e.g., annually. monthly, quarterly, etc.)

• Both A and B are true.

• Neither A nor B are true.

3.

Which of the following statements is/are true?

• A. Equal annual payments for the rest of your life is considered a perpetuity.

• B. The future value of a lump sum will increase if interest is changed to simple interest from compount interest.

• Both A and B are true.

• Neither A nor B are true.