If the Present Value Annuity Factor Is 3

question 80

Multiple Choice

If the present value annuity factor is 3.8896, what is the present value annuity factor for an equivalent annuity due if the interest rate is 9 percent?

• A)3.5684
• B)4.2397
• C)3.8896
• D)5.3127

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Definitions:

Material

The substance or substances of which any physical object is composed or can be made, including metals, woods, plastics, and textiles.

Location

A specific place or position, often used in various contexts to define where something is situated or found.

Moral Hazard

A situation in which one party is more willing to take risks because the costs that may result will not be borne by them.

Adverse Selection

A situation in which asymmetric information leads to the market being dominated by inferior products or by participants who are at a disadvantage.