A) always exceed inflation rates. B) can decline to zero but no lower. C) can be negative, zero, or positive. D) traditionally exceed nominal rates. A) always exceed inflation rates. B) can decline to zero but no lower. C) can be negative, zero, or positive. D) traditionally exceed nominal rates.

Exam 5: The Time Value of Money

What is the relationship between an annually compounded rate and the annual percentage rate (APR)which is calculated for truth-in-lending laws for a loan requiring monthly payments?

(Multiple Choice)

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Question 41

Given a set future value,which of the following will contribute to a lower present value?

(Multiple Choice)

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Question 42

If a borrower promises to pay you $1,900 nine years from now in return for a loan of $1,000 today,what effective annual interest rate is being offered if interest is compounded annually?

(Multiple Choice)

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Question 43

Any sequence of equally spaced,level cash flows is called an annuity.An annuity is also known as a perpetuity.

(True/False)

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Question 44

What APR is being earned on a deposit of $5,000 made 10 years ago today if the deposit is worth $9,848.21 today? The deposit pays interest semiannually.

(Multiple Choice)

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Question 45

What is the present value of a four-year annuity of $100 per year that begins 2 years from today (end of year 1)if the discount rate is 9%?

(Multiple Choice)

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Question 46

How much must be invested today in order to generate a 5-year annuity of $1,000 per year,with the first payment 1 year from today,at an interest rate of 12%?

(Multiple Choice)

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Question 47

If $120,000 is borrowed for a home mortgage,to be repaid at 9% interest over 30 years with monthly payments of $965.55,how much interest is paid over the life of the loan?

(Multiple Choice)

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Question 48

Nominal dollars refer to the amount of purchasing power.

(True/False)

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Question 49

If the future value of an annuity due is $25,000 and $24,000 is the future value of an ordinary annuity that is otherwise similar to the annuity due,what is the implied discount rate?

(Multiple Choice)

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Question 50

"Give me $5,000 today and I'll return $10,000 to you in 5 years," offers the investment broker.To the nearest percent,what annual interest rate is being offered?

(Multiple Choice)

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Question 51

Your real estate agent mentions that homes in your price range require a payment of $1,200 per month for 30 years at 9% interest compounded monthly.What is the size of the mortgage with these terms?

(Multiple Choice)

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Question 52

What is the present value of a five-period annuity of $3,000 if the interest rate per period is 12% and the first payment is made today?

(Multiple Choice)

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Question 53

The Excel function for future value is FV (rate,nper,pmt,PV).

(True/False)

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Question 54

What is the APR on a loan with an effective annual rate of 15.26% and weekly compounding of interest?

(Multiple Choice)

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Question 55

With $1.5 million in an account expected to earn 8% annually over the retiree's 30 years of life expectancy,what annual annuity can be withdrawn,beginning today?

(Multiple Choice)

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Question 56

A corporation has promised to pay $1,000 20 years from today for each bond sold now.No interest will be paid on the bonds during the 20 years,and the bonds are discounted at an interest rate of 7%,compounded semiannually.Approximately how much should an investor pay for each bond?

(Multiple Choice)

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Question 57

Other things being equal,the more frequent the compounding period,the:

(Multiple Choice)

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Question 58

The present value of an annuity stream of $100 per year is $614 when valued at a 10% rate.By approximately how much would the value change if these were annuities due?

(Multiple Choice)

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Question 59

Real interest rates:

(Multiple Choice)

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Question 60

Showing 41 - 60 of 110

Exam 5: The Time Value of Money

What is the relationship between an annually compounded rate and the annual percentage rate (APR)which is calculated for truth-in-lending laws for a loan requiring monthly payments?

Given a set future value,which of the following will contribute to a lower present value?

If a borrower promises to pay you $1,900 nine years from now in return for a loan of $1,000 today,what effective annual interest rate is being offered if interest is compounded annually?

Any sequence of equally spaced,level cash flows is called an annuity.An annuity is also known as a perpetuity.

What APR is being earned on a deposit of $5,000 made 10 years ago today if the deposit is worth $9,848.21 today? The deposit pays interest semiannually.

What is the present value of a four-year annuity of $100 per year that begins 2 years from today (end of year 1)if the discount rate is 9%?

How much must be invested today in order to generate a 5-year annuity of $1,000 per year,with the first payment 1 year from today,at an interest rate of 12%?

If $120,000 is borrowed for a home mortgage,to be repaid at 9% interest over 30 years with monthly payments of $965.55,how much interest is paid over the life of the loan?

Nominal dollars refer to the amount of purchasing power.

If the future value of an annuity due is $25,000 and $24,000 is the future value of an ordinary annuity that is otherwise similar to the annuity due,what is the implied discount rate?

"Give me $5,000 today and I'll return $10,000 to you in 5 years," offers the investment broker.To the nearest percent,what annual interest rate is being offered?

Your real estate agent mentions that homes in your price range require a payment of $1,200 per month for 30 years at 9% interest compounded monthly.What is the size of the mortgage with these terms?

What is the present value of a five-period annuity of $3,000 if the interest rate per period is 12% and the first payment is made today?

The Excel function for future value is FV (rate,nper,pmt,PV).

What is the APR on a loan with an effective annual rate of 15.26% and weekly compounding of interest?

With $1.5 million in an account expected to earn 8% annually over the retiree's 30 years of life expectancy,what annual annuity can be withdrawn,beginning today?

A corporation has promised to pay $1,000 20 years from today for each bond sold now.No interest will be paid on the bonds during the 20 years,and the bonds are discounted at an interest rate of 7%,compounded semiannually.Approximately how much should an investor pay for each bond?

Other things being equal,the more frequent the compounding period,the:

The present value of an annuity stream of $100 per year is $614 when valued at a 10% rate.By approximately how much would the value change if these were annuities due?

Real interest rates:

Goals and Governance of the Firm

Financial Markets and Institutions

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Measuring Corporate Performance

Valuing Bonds

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Net Present Value and Other Investment Criteria

Using Discounted Cash Flow Analysis to Make Investment Decisions

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Introduction to Risk, Return, and the Opportunity Cost of Capital

Risk, Return, and Capital Budgeting

The Weighted-Average Cost of Capital and Company Valuation

Introduction to Corporate Financing and Governance

Venture Capital, IPOs, and Seasoned Offerings

Debt and Payout Policy

Leasing

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