Question
Which two of the following statements is FALSE? (two statments are false) a) The difference between an annuity and a perpetuity is that an annuity
Which two of the following statements is FALSE? (two statments are false)
a) The difference between an annuity and a perpetuity is that an annuity ends after some fixed number of payments.
b) An annuity is a stream of N equal cash flows paid at regular intervals.
c) Most car loans, mortgages, and some bonds are annuities.
d) A growing perpetuity is a stream of N growing cash flows, paid at regular intervals
e) The annual percentage rate indicates the amount of simple interest earned in one year.
f) The nominal interest rate does represent the increase in purchasing power that will result from investing.
g) An inverted yield curve generally signals an expected decline in future interest rates.
I) The shape of the yield curve will be strongly influenced by interest rate expectations.
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