1. The future value of a present sum increases as either the discount rate or the number of periods per year increases, other things held constant.

True

False

2. It is always desirable to have a higher compounding frequency, regardless of the initial investment or the time horizon.

True

False

3. The present value of a future sum increases as the term (N) increases, regardless of compounding frequency.

True

False

4. A perpetuity is a level stream of evenly spaced cash flows that never ends.

True

False