Question: True or False 1. Suppose you are given a positive discount (or interest/compound) rate. If you calculated the PV (present value) of a series of

True or False

1. Suppose you are given a positive discount (or interest/compound) rate. If you calculated the PV (present value) of a series of equal cash flows, it will always exceed the FV (future value) of the same series of cash flows.

2. All else equal, the PV (present value) of an annual ordinary annuity (i.e cash flows only happen at end of each year) increases as the frequency of compounding (# of periods per year) increases.

3. It is not feasible for a future value to be greater than its present value.

4. Early in the life of a loan a large percentage of the payment goes to reduce the outstanding principal.

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