QUESTION 1 An annuity is defined as: Equal cash flows at equal intervals of time forever An asset that pays a fixed sum for a specified period of time Unequal cash fows at equal intervals of time forever None of these answers is correct QUESTION 2 Time Value of Money is an important concept of finance because it takes into account: O Risk compound interest Time O All of these answers are correct QUESTION 3 What is compounding? O Current value of future cash flows discounted at the appropriate discount rate Cash value of the investment at some point in the future O Interest compounded more often than once a year Process of accumulated interest