Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Directions: Select the best answer and write on the space provided before the number. 1. The investor options between risk and return when considering investment
Directions: Select the best answer and write on the space provided before the number. 1. The investor options between risk and return when considering investment decisions is called -. a. risk return trade off c. trade off risk return b. risk-return trade-off d. trade off retun risk 2. It can also play an essential role in determining a portfolio with the appropriate levels of risk and reward. a. Value C. Time b. Risk d. Schedule 3. It is important in the computation of future wealth. a. Double Interest c. Single Interest b. Discounted Interest d. Compound Interest 4. Which of the following statement is true? I. Risk is the variability of an asset's future returns. Il. The potential to replace lost funds is one of the variety of factors that the appropriate risk-return trade-off depended. Ill. Systematic risk and Unsystematic risk are total risk classification a. Only I and II are true c. Only I and Ill are true b. Only II and Ill are true d. all the statement are true 5 The process of conversion from present values to future values is called-. a. Budgeting c. Discounting b. Compounding d. Time Value of money 6. PMT acronym in the spreadsheet means... a. Postpayment b. Prepayment C. Pre-Managerial Time d. Payment 7. In 2 years you are to receive P 10,000.00. If the interest rate were to suddenly decrease, the present value of that future amount to you would a. remain unchange c. fall b. rise d. the correct answer cannot be determined8. If the bank gives 12% interest rate per annum, then which will be the rate per month. a. 12% c. 1% b.5% d. 6% 9. Which of the following expresses 6.5%? a. 0.0065 C. 0.650 b. 6.50 d. 0.0650 10. It is essential when first learning time value concepts, but even experts use them to analyze complex finance problems. a. Value C. Time b. Timelines d. Schedules 11. It is the process of computing the present value of a cash flow or a series of cash flows. a. Simple Interest c. Dicounting b. Compounding d. Retun of investment 12. What does the concept of compound interest refer to? a. The process of gradually retiring a debt through periodic payments of principal and interest. b. The process of servicing a debt with regular interest payments, followed lump sum payment of principal and interest at the end of the loan term.c. The process of converting future lump sums and annuities into present values at a stated interest rate. d. The process of earning interest on a original amount, plus interest on interest previously earned. 13. Which are the three types of interest rate used in time value of money? a. Fixed rate, current rate, market rate c. Fixed rate, floating rate, current rate b. Market rate, combination rate, fixed rate d. Fixed rate, floating rate, combination rate 14. Why must money have time value? a. Individuals prefer future consumption to present consumption b. Money today is worth more than money tomorrow in terms of purchasing power c. There is a possibility of eaming risk free return on money invested today d. B and C above 15. If you put P 1,000.00 in a savings account and make no further deposits, what type of calculation would provide you with the value of the account in 20 years? a. Future value of a single amount c. Present value of a single amount b. Simple interest d. Present value of a series of deposits
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started