Higher present value than similar ordinary annuity

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Reference no: EM131025549

Which of the following statements is NOT CORRECT, assuming positive interest rates?

A 5-year $100 annuity due will have a higher present value than similar ordinary annuity

A 15-year, $100,000 mortgage will have larger monthly payments than an otherwise similar 30-year mortgage

If an investment pays 10% interest compounded annually, its effective rate will also be 10%.

Securities A and B offer the same nominal rate of interest, but A pays interest quarterly and B pays semiannually. Investment B will have the higher present value.

An investment's nominal interest rate will always be equal to or greater than its effective annual rate.

Reference no: EM131025549

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