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

question 43

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) The present value of ORD must exceed the present value of DUE,but the future value of ORD may be less than the future value of DUE.
• 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 DUE exceeds the present value of ORD,and the future value of DUE also 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.

Recognize various classic problem-solving experiments and their strategies, such as working backward.

Differentiate between reasoning from analogies and the cognitive processes used in solving well-defined versus ill-defined problems.

Identify the impact of neurological damage on problem-solving abilities.

Analyze the development of critical thinking skills and dispositions during the college years.

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Definitions:

Emerging Adulthood

A phase of life development occurring from late teens through twenties, marked by exploration, instability, and self-focus.

Transition To Adulthood

The process through which individuals move from adolescence into adulthood, encompassing changes in roles, responsibilities, and social relationships.

Implementation

The process of putting a decision or plan into effect; execution.

Job Market

The job market refers to the availability of employment and labor, as well as the demand for work in the economy.