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Questions and Answers
The present value of an annuity due is smaller than an ordinary annuity, assuming the same cash flows and interest rate.
The present value of an annuity due is smaller than an ordinary annuity, assuming the same cash flows and interest rate.
False (B)
An annuity due has payments made at the end of each period.
An annuity due has payments made at the end of each period.
False (B)
Rent payments are an example of an ordinary annuity.
Rent payments are an example of an ordinary annuity.
False (B)
The present value of an ordinary annuity is independent of the prevailing interest rate.
The present value of an ordinary annuity is independent of the prevailing interest rate.
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Mortgage payments are an example of an annuity due.
Mortgage payments are an example of an annuity due.
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An annuity due has variable cash flows.
An annuity due has variable cash flows.
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