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.

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.

FALSE is interest rate equals zero then there is no tiem value of money. Because both offer the same amount of nominal cash payment his presetn value at rate = 0% is equal.

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

FALSE The annuity-due present value is higher as the payment are discounted for one less period.

.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

FALSE the annuity-due capitalize for an additional period, thus his future value is also higher.

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

FALSE for reasons state in (b) and (c)