1. When comparing annual compounding to semiannual compounding;
a. Semiannual compounding will lead to higher effective annual rates,
b. Annual compounding will lead to lower present values,
c. None of the above,
d. Both a and b.
2. Why are current cash flows more valuable than future cash flows?
a. Inflation,
b. Future cash flows are riskier,
c. Current cash flows can earn interest,
d. all of the above.