Question 1

In a Bridge Loan, the lender

Accepted Answer

A)  calculates loans the entire value of the property to the borrower. 
B)  requires a 20 percent down payment on the value of the property. 
C)  calculates interest on a daily basis. 
D)  knows the exact payment prior to making the loan. 
A)  calculates loans the entire value of the property to the borrower. 
B)  requires a 20 percent down payment on the value of the property. 
C)  calculates interest on a daily basis. 
D)  knows the exact payment prior to making the loan.

Question 2

Simple interest is added on to the principal to determine the total amount owed or due.

Accepted Answer

A) True 
 B)False

Question 3

The time value of money is the gain of purchasing power that occurs over time as a result of inflation.

Accepted Answer

A) True 
 B)False

Question 4

The effective rate takes compounding into effect.

Accepted Answer

A) True 
 B)False

Question 5

With a Fixed Principal Commercial Loan where the amount borrowed is $120,000 for 5 years at 8 percent, the first monthly payment will be

Accepted Answer

A)  $2,000 
B)  $2,800 
C)  $9,600 
D)  $11,600 
A)  $2,000 
B)  $2,800 
C)  $9,600 
D)  $11,600

Question 6

N. Trest bought a $10,000 Treasury bill at a 1.32% discount for 13 weeks (91 days). How much does N pay for the bond?

Accepted Answer

A)  $10,000 
B)  $9,967.09 
C)  $9,870.54 
D)  $9,685.90 
A)  $10,000 
B)  $9,967.09 
C)  $9,870.54 
D)  $9,685.90

Question 7

Fixed Principal Commercial Loans can only use a fixed amount of interest.

Accepted Answer

A) True 
 B)False

Question 8

Joe M. purchases a house for $410,000. He sells the home 8 years later for $629,000. What is his internal rate of return (IRR)?

Accepted Answer

A)  5.15% 
B)  1.50% 
C)  15% 
D)  5.50% 
A)  5.15% 
B)  1.50% 
C)  15% 
D)  5.50%

Question 9

JT purchases 1,000 shares of stock at $29 per share in January 2006. He sells the 1,000 shares in January 2012 for $32 per share. What is his internal rate of return?

Accepted Answer

A)  6.15% 
B)  5.61% 
C)  5.19% 
D)  1.65% 
A)  6.15% 
B)  5.61% 
C)  5.19% 
D)  1.65%

Question 10

Fixed Principal Commercial Loans can use either a fixed amount of interest or a variable amount.

Accepted Answer

A) True 
 B)False

Question 11

If you paid $7.00 to go to a movie in 2006, what will the price of this movie be in the year 2011 if inflation averages 6 percent?

Accepted Answer

A)  $5.12 
B)  $5.23 
C)  $9.37 
D)  $9.73 
A)  $5.12 
B)  $5.23 
C)  $9.37 
D)  $9.73

Question 12

You have an absolutely brilliant child who is six years old and will be attending a private college in twelve years. You know that a four -year college now costs at least $30,000 per year, including tuition, books, and room and board. The cost of sending a child to college has increased by 7 percent per year, and you believe this will be true for the next twelve years. How much will the annual tuition be when your child is eighteen?

Accepted Answer

A)  2.2522 
B)  2.2107 
C)  2.0122 
D)  1.5007 
A)  2.2522 
B)  2.2107 
C)  2.0122 
D)  1.5007

Question 13

Which of the following is true for Fixed Principal Commercial Loans?
I.	The interest rate may be fixed or variable.
II.	The principal payment remains the same for the duration of the loan.
III.	The bank calculates the payment due each month with a variable interest loan.
IV.	The bank calculates an amortization schedule with a variable interest loan.
V.	The bank provides the borrower with an amortization schedule with a fixed interest fixed

Accepted Answer

A)  I, II, III & IV 
B)  I, II, IV & V 
C)  I, II, III & V 
D)  I, III, IV & V 
E)  All of the above are true. 
A)  I, II, III & IV 
B)  I, II, IV & V 
C)  I, II, III & V 
D)  I, III, IV & V 
E)  All of the above are true.

Question 14

A college education costs approximately $75,000 at an Ivy League school. If inflation averages 5% per year, what will be the cost of the college education in 15 years?

Accepted Answer

A)  $1,745,697.74 
B)  $155,919.61 
C)  $125,754.75 
D)  $36,076.28 
A)  $1,745,697.74 
B)  $155,919.61 
C)  $125,754.75 
D)  $36,076.28

Question 15

The rate that the bank is offering is 2 percent compounded monthly. This is an actual rate of interest of _____________ percent.

Accepted Answer

A)  2.00 
B)  2.02 
C)  2.04 
D)  2.50 
A)  2.00 
B)  2.02 
C)  2.04 
D)  2.50

Question 16

With a Fixed Principal Commercial Loan where the amount borrowed is $120,000 for 5 years at 8 percent, the second monthly payment will be

Accepted Answer

A)  $2,000 
B)  $2,800 
C)  $2,786.67 
D)  none of the above. 
A)  $2,000 
B)  $2,800 
C)  $2,786.67 
D)  none of the above.

Question 17

You buy 1,000 shares of stock at $5.00 per share in January of 2004. You sell the stock at $7.50 per share in January of 2007. What is your internal rate of return (IRR)?

Accepted Answer

A)  1.1447% 
B)  14.47% 
C)  18.00% 
D)  87.36% 
A)  1.1447% 
B)  14.47% 
C)  18.00% 
D)  87.36%

Question 18

N. Trest bought a $10,000 Treasury bill at a 18% discount for 13 weeks (91 days). How much does N pay for the bond?

Accepted Answer

A)  $10,000 
B)  $9551.23 
C)  $8,732.73 
D)  $8,548.95 
A)  $10,000 
B)  $9551.23 
C)  $8,732.73 
D)  $8,548.95

Question 19

JT purchases 1,000 shares of stock at $2.48 per share in January 2006. He sells the 1,000 shares in January 2010 for $5.50 per share. What is his internal rate of return?

Accepted Answer

A)  22.03% 
B)  2.03% 
C)  3.22% 
D)  2.33% 
A)  22.03% 
B)  2.03% 
C)  3.22% 
D)  2.33%

Question 20

Compound interest is the interest that is earned or charged on both the principal amount and on the interest already accrued.

Accepted Answer

A) True 
 B)False

In a Bridge Loan, the lender

Simple interest is added on to the principal to determine the total amount owed or due.

The time value of money is the gain of purchasing power that occurs over time as a result of inflation.

The effective rate takes compounding into effect.

With a Fixed Principal Commercial Loan where the amount borrowed is $120,000 for 5 years at 8 percent, the first monthly payment will be

N. Trest bought a $10,000 Treasury bill at a 1.32% discount for 13 weeks (91 days). How much does N pay for the bond?

Fixed Principal Commercial Loans can only use a fixed amount of interest.

Joe M. purchases a house for $410,000. He sells the home 8 years later for $629,000. What is his internal rate of return (IRR)?

JT purchases 1,000 shares of stock at $29 per share in January 2006. He sells the 1,000 shares in January 2012 for $32 per share. What is his internal rate of return?

Fixed Principal Commercial Loans can use either a fixed amount of interest or a variable amount.

If you paid $7.00 to go to a movie in 2006, what will the price of this movie be in the year 2011 if inflation averages 6 percent?

A college education costs approximately $75,000 at an Ivy League school. If inflation averages 5% per year, what will be the cost of the college education in 15 years?

The rate that the bank is offering is 2 percent compounded monthly. This is an actual rate of interest of _____________ percent.

With a Fixed Principal Commercial Loan where the amount borrowed is $120,000 for 5 years at 8 percent, the second monthly payment will be

You buy 1,000 shares of stock at $5.00 per share in January of 2004. You sell the stock at $7.50 per share in January of 2007. What is your internal rate of return (IRR)?

N. Trest bought a $10,000 Treasury bill at a 18% discount for 13 weeks (91 days). How much does N pay for the bond?

JT purchases 1,000 shares of stock at $2.48 per share in January 2006. He sells the 1,000 shares in January 2010 for $5.50 per share. What is his internal rate of return?

Compound interest is the interest that is earned or charged on both the principal amount and on the interest already accrued.

Finance and Economic Concepts

Financial Management and Planning

Financial Statements

Analysis of Financial Statements

Profit, Profitability, and Break-Even Analysis

Forecasting and Pro Forma Financial Statements

Working Capital Management

Time Value of Moneypart Ii: Annuities

Capital Budgeting

Personal Finance

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Exam 8: Time Value of Moneypart I: Future and Present Value of Lump Sums

In a Bridge Loan, the lender

Simple interest is added on to the principal to determine the total amount owed or due.

The time value of money is the gain of purchasing power that occurs over time as a result of inflation.

The effective rate takes compounding into effect.

With a Fixed Principal Commercial Loan where the amount borrowed is $120,000 for 5 years at 8 percent, the first monthly payment will be

N. Trest bought a $10,000 Treasury bill at a 1.32% discount for 13 weeks (91 days). How much does N pay for the bond?

Fixed Principal Commercial Loans can only use a fixed amount of interest.

Joe M. purchases a house for $410,000. He sells the home 8 years later for $629,000. What is his internal rate of return (IRR)?

JT purchases 1,000 shares of stock at $29 per share in January 2006. He sells the 1,000 shares in January 2012 for $32 per share. What is his internal rate of return?

Fixed Principal Commercial Loans can use either a fixed amount of interest or a variable amount.

If you paid $7.00 to go to a movie in 2006, what will the price of this movie be in the year 2011 if inflation averages 6 percent?

A college education costs approximately $75,000 at an Ivy League school. If inflation averages 5% per year, what will be the cost of the college education in 15 years?

The rate that the bank is offering is 2 percent compounded monthly. This is an actual rate of interest of _____________ percent.

With a Fixed Principal Commercial Loan where the amount borrowed is $120,000 for 5 years at 8 percent, the second monthly payment will be

You buy 1,000 shares of stock at $5.00 per share in January of 2004. You sell the stock at $7.50 per share in January of 2007. What is your internal rate of return (IRR)?

N. Trest bought a $10,000 Treasury bill at a 18% discount for 13 weeks (91 days). How much does N pay for the bond?

JT purchases 1,000 shares of stock at $2.48 per share in January 2006. He sells the 1,000 shares in January 2010 for $5.50 per share. What is his internal rate of return?

Compound interest is the interest that is earned or charged on both the principal amount and on the interest already accrued.

Finance and Economic Concepts

Financial Management and Planning

Financial Statements

Analysis of Financial Statements

Profit, Profitability, and Break-Even Analysis

Forecasting and Pro Forma Financial Statements

Working Capital Management

Time Value of Moneypart Ii: Annuities

Capital Budgeting

Personal Finance

Filters