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Chapter 9

Question 1 of 10

1

tick marks designate ___ of periods

Select one of the following:

  • end

  • beginning

  • middle

  • zero

Explanation

Question 2 of 10

1

time 0 is the ''starting'' point ( beginning of period 1)
time 1 is the ''end'' of period 1 (the beginning of period 2) ; and so on

Select one of the following:

  • True
  • False

Explanation

Question 3 of 10

1

finding future values (moving to the __ along the time line) is called ___

Select one or more of the following:

  • left

  • right

  • top

  • down

  • beginning

  • middle

  • compounding

Explanation

Question 4 of 10

1

3 primary methods to find FVs

Select one or more of the following:

  • solve the fv equation using a regular (non-financial) calculator

  • use a financial calculator, that is one with financial functions

  • use a computer with a spreadsheet program such as excel, lotus 1-2-3, or quattro pro

Explanation

Question 5 of 10

1

finding present values (moving to the ___ along the time line) is called ___

Select one of the following:

  • left, discounting

  • right, discounting

  • left, expenses

  • right, expenses

Explanation

Question 6 of 10

1

Where did the discount rate come from?

Select one or more of the following:

  • discount rate is the ''opportunity cost rate''

  • it does not depend on the source of the investment funds

  • rate could be earned on alternative investments of ''similar risk''

Explanation

Question 7 of 10

1

a perpetuity is an annuity that lasts _____

Select one of the following:

  • a short period of time

  • a long period of time

  • forever

  • 1 day

Explanation

Question 8 of 10

1

an annuity is a series of ''___ payments'' at fixed intervals for a specified number of period

Select one of the following:

  • discounted

  • undiscounted

  • equal

  • same

  • risky

Explanation

Question 9 of 10

1

symbol ''PMT'' represents annuity __

Select one of the following:

  • payments

  • cash

  • transaction

Explanation

Question 10 of 10

1

2 types of annuity:
1) ordinary annuity - occurs at the ______ of each period
2) annuity due - payments are made at the ___ of each period

Select one of the following:

  • beginning, end

  • end, beginning

Explanation

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