You are comparing two annuities which offer quarterly payments of $2,500 for five years and pay 0.75 percent interest per month.
Annuity A will pay you on the first of each month while annuity B will pay you on the last day of each month. Which one of the following statements is correct concerning these two annuities? A) These two annuities have equal present values as of today and equal future values at the end of year five.
B) These two annuities have equal present values but unequal futures values at the end of year five.
C) Annuity A has a smaller future value than annuity B.
D) Annuity B is an annuity due.
E) Annuity B has a smaller present value than annuity A.
E) Annuity B has a smaller present value than annuity A.
Explanation:
A fix Payment for a specified period of time is called annuity. The discounting of these payment on a specified rate is known as present value of annuity and Compounding of these values is known as the future value of annuity.
Annuity paid at the start of each period is advance annuity and paid at the end of each period is ordinary annuity.
While Calculating the present value of the annuity, the Present value of advance annuity is higher than the present value of ordinary annuity.
A wholly owned subsidiary is a company whose entire stock is held by another company, called the parent company. In this case Fun Times will own 100% of Events & Adventures' common stock.
The question is incomplete as there is no above statement here. Here a general interpretation of the question shall be made. Normally human resource mangers have to go throughout thousands of resumes and it is not always possible for them to read line by line. This can negate chances of getting through for an employee. So they can make it a bit attractive by going some extra edge and using attractive lines that are some in style and structure. They should not bombard the resume with precious English words by just represent their academic and extra curricular sides in brief.
Nondiversifiable risk or systemic risk is risk that cannot be eliminated by diversifying investments in a portfolio. It is the risk inherent in the industry. it is measured by beta in the CAPM.
Diversifiable risks are risks that can be avoided by diversifying investments in a portfolio. It is also known as business risk
