Question: 1. TRUE or FALSE: A dollar today is worth more than a dollar tomorrow if the interest rate is positive. a. True b. False 2.

1. TRUE or FALSE: A dollar today is worth more than a dollar tomorrow if the interest rate is positive. a. True b. False

2. TRUE or FALSE: One can find the future value at the end of year 10 of an amount deposited today by dividing the amount deposited today by an appropriate discount factor. a. True b. False

3. TRUE or FALSE: The rate of return on any perpetuity is equal to its cash flow multiplied by its present value. a. True b. False

4. TRUE or FALSE: An annuity is an asset that pays a fixed amount each period for a specified number of periods. a. True b. False

5. TRUE or FALSE: An equal-payment home mortgage is an example of an annuity. c. True d. False

6. TRUE or FALSE: In the amortization of a mortgage loan with equal payments, the fraction of each payment devoted to interest steadily increases over time and the fraction devoted to reducing the loan balance decreases steadily. a. True b. False

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