Which One of These Statements Concerning Two Annuities Is Correct

question 10

Multiple Choice

Which one of these statements concerning two annuities is correct? Assume both annuities have $1,000 annual cash flows for four years.

• A)The ordinary annuity will pay on the first day of each time period.
• B)The annuity due is more valuable than the ordinary annuity.
• C)The annuity due will pay one more payment than the ordinary annuity.
• D)The ordinary annuity will have the highest value at the end of Year 4.
• E)Both annuities are of equal value given any discount rate.

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