8. If a bank pays quarterly compounding on its savings accounts that stated (nominal) rate will be greater than effective annual rate.

True or False

9. Assume you have won the lottery and you have a choice to receive your money in one or two ways. Option one is to receive $50,000 per year for the next 5 years. Option 2 is a single payment of $200,00 received immediately. Which of the two options are preferable?

10. If the interest rates are positive, the present and future values of an annuity due will always be higher than the present and future values of an ordinary annuity.

True or False