Section 1: Multiple Choice Questions. Each question is worth 1 mark; Total 8 marks 1. You are comparing two annuities. Annuity A pays $100 at the end of each month for Annuity B pays $100 at the beginning of each month for 10 years. The rate of return on both is 8 percent. Which one of the following statements is correct given this information? A. The present value of Annuity A is equal to the present value of Annuity B. B. Annuity B will pay one more payment than Annuity A will C. The future value of Annuity A is greater than the future value of Annuity B. D. Annuity B has both a higher present value and a higher future value than Annuity A. E. Annuity A has a higher future value but a lower present value than Annuity B. 2. This moming, Jeff found a bond certificate lying on the floor of a bank. He picked it up and PI that the bond matured today. He presented the bond to the bank teller and received both the and interest payment. The bond that Jeff found must have been which one of the following? A. Debenture B. Note C. Registered form bond D. Bearer form bond E. Callable bond 3. Which one of the following methods of analysis is most appropriate to use when two investme are mutually exclusive? A. Intemal rate of return B. Profitability index C. Net present value D. Modified internal rate of return E. Average accounting return 4. Which one of the following will increase the current value of a stock? A. Decrease in the dividend growth rate B. Increase in the required return C. Increase in the market rate of return D. Decrease in the expected dividend for next year E. Increase in the capital gains yield