PlePleas

QUESTION 5 Questions 5 to 7 In response to a few questions regarding present value, future value, simple interest and compounding interest Grillo made the following points. Point 1: The present value decreases as the time period increases and the interest rate is inversely related to the future value. Pont 2: An annuity due has payments that occur at the beginning of each time period. The present value of an annuity will increase when either the amount of the annuity payment increases or the interest rate increases. Point 3: A premium bond has a coupon rate that exceeds the yield to maturity and the market price that exceeds the face value. When a bond's yield to maturity is greater than the bond's coupon, the bond is selling at a discount. Point4: Municipal bonds generally have a lower coupon rate than comparable corporate bonds and are appealing to individuals with low marginal tax rates. Is Grillo's Point 1 most likely correct? O A No, the present value does not decrease as the time period increases. B. No interest rate is not inversely related to the future value. O C. Yes QUESTION 6 The Point 2 from Grillo's statement is most likely incorrect with respect to: O A Annuity payments. O B. Interest rate. OC. An annuity due. QUESTION 7 Are the statements identified as Point 3 and Point 4 correct? O A No for Point 3, but yes for Point 4. O B. No for Point 3 and 4. O C. Yes for Point 3, but no for Point 4