You Are Considering Two Equally Risky Annuities,each of Which Pays

question 21

Multiple Choice

You are considering two equally risky annuities,each of which pays $5,000 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?

• A) A rational investor would be willing to pay more for DUE than for ORD,so their market prices should differ.
• B) 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.
• C) The present value of ORD exceeds the present value of DUE,and the future value of ORD also exceeds the future value of DUE.
• D) The present value of ORD exceeds the present value of DUE,while the future value of DUE exceeds the future value of ORD.
• E) 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.

Understand the concept of geological time scales and the major eons.

Comprehend the basic principles of radioactive dating and its application in determining the age of fossils and rocks.

Identify appropriate samples for radioactive carbon and potassium dating techniques.

Grasp the formation and dating of sedimentary rocks and their significance in the fossil record.

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Definitions:

Maximal Stimulus

The level of stimulus at which the maximum rate of contraction or response is achieved in a muscle or nerve.

Treppe Stimulus

A phenomenon where muscle contractions become more forceful with subsequent stimulations, due to increased calcium availability.

Threshold

The minimum level of stimulation required to trigger a neural impulse or a response in a sensory system.

AChE

Acetylcholinesterase, an enzyme that breaks down acetylcholine, a neurotransmitter, in the synapse, terminating the signal between nerves.