1.In which case will an investor receive the most interest:a.10%, compounded annually.b.10%, compounded monthly.c.10%, compounded continuously.d.10%, compounded daily.e.There is not enough information provided to correctly answerthis question.

2.An annuity is: a.a stream of equal payments at unequal time intervals.b.a stream of equal payments at equal time intervals.c.a stream of equal payments that continue forever.d.all of the above.e.none of the above.

3.Aperpetuityis: a.a stream of equal payments at unequal time intervals.b.a stream of equal payments at equal time intervals.c.a stream of equal payments that continue forever.d.all of the above.e.none of the above.

4.The basic rule of the time value of money(assuming positive interest rates)is:a.investments will always be worth more tomorrow than they are today.b.it's always wiser to save a dollar for tomorrow than to spend it today.c.a dollar in hand today is worth more than a dollar promised at some time in the future.d.Allof the statements above express an aspect of the basic rule of time value of money.e.None of the statementsabove represent the basic rule of the time value of money

5.The present value of a future amount(assuming positive interest ratesand a time difference between the present and the future):a.will always be less than the future amount.b.can be calculated precisely if the discount rate and number of periods is known.c.isgreaterthan the future value.d.both a. and b. above are true.e.None of the statements above are correct.

6.In 2 years you are to receive $10,000. If the interest rate were to suddenly decrease, the present value of that future amount to you would __________.a.fallb.risec.remain unchangedd.The correct answer cannot be determined without more information.

7.Assume that the interest rate is greater than zero. Which of the following cash-inflow streams totaling $1,500 would you prefer? The cash flows are listed in order for Year 1, Year 2, and Year 3 respectively.a.$700in Year 1;$500in Year 2;$300in Year 3b.$300in Year 1;$500in Year 2;$700in Year 3c.$500in Year 1;$500in Year 2;$500in Year 3d.Any of the above, since they each sum to $1,500.

8.Assume that the interest rate is equal to zero(i.e., 0%). Which of the following cash-inflow streams totaling $1,500 would you prefer? The cash flows are listed in order for Year 1, Year 2, and Year 3 respectively.a.$700in Year 1;$500in Year 2;$300in Year 3b.$300in Year 1;$500in Year 2;$700in Year 3c.$500in Year 1;$500in Year 2;$500in Year 3d.Any of the above, since they each sum to $1,500.

9.To increase a given future value, the discount rate should be adjusted __________.a.upwardb.downwardc.first upward and then downwardd.None of the above answers are correct; you should use PVI