2 SECTION I: YOU CAN’T HANDLE THE TRUTH!!! OR MAYBE YOU CAN Questions 1-4 (20 points total) True or False, Explain: (20 points total –5 points each question) Use the following information to determine whether the statements are true or false. Check the appropriate box. If the statement is false AND ONLY if it is false provide a BRIEF explanation as to why it is false (BRIEF means AT MOST a few sentences). Show work if necessary. 1.You are going to purchase a motorcycle and are offered the following three loans. You don’t really care about the timing of the payments, but you want the cheapest possible loan. Loan I.12.00% APR compounded monthly. Loan II.12.25% APR, compounded semi-annually Loan III.12.50% APR, compounded annually Statement: You should choose Loan I since it is the cheapest rate. 2.You invest $100 in a mutual fund. Over a ten-year period, the fund delivers an arithmetic average return of 6% per year, with a standard deviation of 8.45% per year. Statement: After 10 years, the value of your investment must be between $178 and $180 3.You have the following data for Boiiiing!! Incorporated, a leading trampoline manufacturer.