You are considering two equally risky annuities, each of which pays $15,000 per year for 20 years. Investment ORD is an ordinary (or deferred) annuity, while Investment DUE is an annuity due. Which of the following statements is CORRECT?
a. If the going rate of interest decreases from 10% to 0%, the difference between the present value of ORD and the present value of DUE would remain constant.
b. The present value of ORD must exceed the present value of DUE, but the future value of ORD may be less than the future value of DUE.
c. The present value of DUE exceeds the present value of ORD, while the future value of DUE is less than the future value of ORD.
d. The present value of ORD exceeds the present value of DUE, and the future value of ORD also exceeds the future value of DUE.
e. The present value of DUE exceeds the present value of ORD, and the future value of DUE also exceeds the future value of ORD.
e
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Which of the following is an example of duress?
A) Joe refuses to sell Harry his car unless Harry offers him more money. B) Joe, knowing of Harry's financial situation, refuses to sell him his car. C) Joe counteroffers Harry's original offer. D) Joe wants to purchase Smith's car from him, and Smith sells it to someone else. E) Joe threatens to smash Harry's car if Harry won't sell it to him.
A termination date is required for all contracts below EXCEPT
A. an open listing. B. an exclusive agency listing. C. an exclusive right-to-sell listing. D. an option.