Which of the Following Is TRUE About Perpetuities

question 5

Multiple Choice

Which of the following is TRUE about perpetuities?

• A)All else equal,the value of a perpetuity is higher when the periodic cash flow is lower.
• B)All else equal,the value of a perpetuity is higher when the interest rate is higher.
• C)If two perpetuities have the same present value and the same interest rate,they must have the same cash flows.
• D)All else equal,the value of a perpetuity is lower when the interest rate is lower.
• E)If two perpetuities have the same cash flows,they must have the same present value.

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Definitions:

(COCl)2

Phosgene gas, a toxic compound used in organic synthesis, characterized by the formula, with two carbonyl chloride groups.

Nucleophilic Acyl Substitution

A type of organic reaction where a nucleophile replaces a leaving group in an acyl compound, forming a new covalent bond.

Esters

Organic compounds derived from an acid where at least one -OH (hydroxyl) group is replaced by an -O- (alkoxy) group, known for their fruity smells.

Amides

Organic compounds containing a carbonyl group linked to a nitrogen atom from an amine, fundamental in the structure of proteins.