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An annuity is expected to pay dividends of $ 2 5 . 7 5 each year, forever. If the discount rate is 8 % ,
An annuity is expected to pay dividends of $ each year, forever. If the discount rate is
compounded quarterly and the annuity is currently selling for $ are you interested in
buying this annuity?
A No this annuity costs more than it is worth.
B Yes, the cash flow is guaranteed.
C Yes, this annuity costs less than it is worth.
D No this annuity costs less than it is worth.
E Yes, this annuity costs more than it is worth.
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