Compound Curiosity and Level

 Compound Fascination and Price Essay

CHAPTER a few

TIME WORTH OF MONEY

(Difficulty Levels: Easy, Easy/Medium, Medium, Medium/Hard, and Hard)

You should see the preface for information for the AACSB letter indicators (F, M, and so forth ) about them lines.

Multiple Choice: True/False

(5-2) Compounding

1 .

Farreneheit J

Solution: aEASY

Needs to invest early on for retirement increases the benefits associated with compound curiosity.

a. Accurate

b. Fake

(5-2) Compounding

2 .

Farreneheit J

Response: bEASY

Starting to invest early for old age reduces some great benefits of compound curiosity.

a. Accurate

b. False

(5-2) Increasing

3.

F J

Solution: aEASY

A period line is meaningful regardless if all cash goes do not occur annually. a. True

b. False

(5-2) Compounding

some.

F J

Answer: bEASY

A time collection is not really meaningful except if all cash goes occur annually. a. The case

b. Fake

(5-2) Increasing

F L

Answer: aEASY

5.

Time lines could be constructed in case of where a number of the cash flows occur yearly but other folks occur quarterly.

a. Accurate

b. Bogus

(5-2) Increasing

6.

Farreneheit J

Solution: bEASY

Period lines may not be constructed in situations where a number of the cash flows occur yearly but others occur quarterly.

a. The case

b. Bogus

Chapter five: Time Worth of Money

True/False

Page 137

(5-2) Increasing

7.

Farrenheit J

Solution: aEASY

Period lines can be constructed to get annuities in which the payments happen at either the beginning or the end from the periods.

a. True

w. False

(5-2) Compounding

almost 8.

F J

Answer: bEASY

Time lines cannot be made for annuities unless each of the payments arise at the end from the periods.

a. True

b. False

(5-2) Compounding

being unfaithful.

F J

Answer: aEASY

Some of the funds flows proven on a fb timeline can be in the form of annuity obligations while others may be uneven amounts.

a. The case

b. Phony

(5-2) Compounding

10.

F J

Response: bEASY

A few of the cash flows shown on a time line could be in the form of annuity payments but none could be uneven quantities.

a. Accurate

b. False

(5-3) PV versus FV

11.

C J

Answer: b

EASY

If the price cut (or interest) rate is positive, this current value of an expected number of payments will usually exceed the near future value of the same series.

a. True

n. False

(5-3) PV vs FV

doze.

C M

Answer: a

EASY

In case the discount (or interest) rate is great, the future benefit of an predicted series of repayments will always go beyond the present worth of the same series.

a. True

b. Fake

(5-3) PV versus FV

13.

C J

Response: a

EASY

Disregarding risk, if funds has time value, it truly is impossible to get the present value of a given sum to exceed its future value.

a. True

m. False

Page 138

True/False

Chapter 5: Time Benefit of Money

Section 5: Time Value involving

True/False

Webpage 139

(5-3) PV versus FV

16.

C J

Answer: n

EASY

Ignoring risk, in the event money features time benefit, it is not possible for the future value of a offered sum to exceed it is present worth.

a. Authentic

b. Bogus

(5-15) Effective annual charge

15.

C J

Response: b CONVENIENT

If a bank compounds savings accounts quarterly, the nominal rate will exceed the effective twelve-monthly rate.

a. True

b. False

(5-15) Effective gross annual rate

18.

C L

Answer: a EASY

If a bank compounds savings accounts quarterly, the effective annual rate will go over the nominal rate.

a. True

b. False

(5-2) Compounding

17.

The greater

more suitable

the greater

some future

C J

Response: b CHANNEL

the number of compounding periods in a year, after that (1)

the near future value of a lump sum purchase at Time 0 and (2)

the modern day value of your given lump sum to be received at

date.

a. True

b. Phony

(5-2) Increasing

18.

The higher

the greater

small

some long term

C T

Answer: a MEDIUM

the amount of compounding durations within a season, then (1)

the future benefit of a huge investment by Time 0 and (2)

the present value of a given lump sum to be received at

date.

a. True

n. False...

News