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Exam $2-$ Part$1(75$ min$)[$See Module $9-3$ Important Reminder on Canvas before Opening$]$

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Item$9$

Time Remaining $1$ hour $10$ minutes $59$ seconds

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Which one of the following statements related to annuities and perpetuities is$/$are correct?

I. An ordinary annuity is worth less than an annuity due given equal annual cash flows for five years at $10$ percent interest, compounded annually.

II$.$ A perpetuity comprised of $$500$ monthly payments is worth more than an annuity comprised of $$500$ monthly payments, given an interest rate of $12$ percent, compounded monthly.

III. Most loans are a form of a perpetuity.

IV$.$Both the future and present value of a perpetuity can be computed.

V$.$ Perpetuities are finite but annuities are not.

Multiple Choice

II$,$ III and IV only

I, II$,$ III and IV only

II and III only

I, II$,$ IV and V only

I, II only

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