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You are considering two equally risky annuities, each of which pays $25,000 per year for 10 years. Investment ORD is an ordinary (or deferred) annuity,
You are considering two equally risky annuities, each of which pays $25,000 per year for 10 years. Investment ORD is an ordinary (or deferred) annuity, while Investment DUE is an annuity due. Which of the following statements is CORRECT? O If the going rate of interest decreases from 10% to 0%, the difference between the present value of ORD and the present value of DUE would remain constant. O The present value of ORD exceeds the present value of DUE, and the future value of ORD also exceeds the future value of DUE. O The present value of ORD exceeds the present value of DUE, while the future value of DUE exceeds the future value of ORD. O The present value of DUE exceeds the present value of ORD, while the future value of DUE is less than the future value of ORD. O A rational investor would be willing to pay more for DUE than for ORD, so their market prices should differ. C Apple (AA.. 9 Quiz: Wee.. RR RRC Status... X 2022 Wee.. G
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