1. A loan where the borrower receives money today and repays a single lump sum at some time in the future is called an) loan. A. Amortized. B. Continuous. C. Pure discount D. interest-only 2. A loan where the borrower pays interest each period and repays the entire principal of the loan at some point in the future is called an) Joan. A Amortized. B. Continuous. C. Balloon D. Interest-only. 3. The present value factor for annuities is calculated as: A. (1 - present value factor) B. Present value factor+ (1/r) C. (Present value factor r) + (1/8) 4. A loan where the borrower pays interest each period, repays part of the principal of the loan over time, and repays the remainder of the principal at the end of the loan, is called an) loan. A Amortized. B. Balloon. C. Pure discount. D. Interest-only. 5. Which of the following fit the definition of an annuity? I. S100 a quarter for 10 years II. $200 a year forever III. SIO a week for 1.000 weeks IV S150 a month for 72 months A. I and IV only B. II only C. I,III and IV only D. I, II, III and IV ) is the formula 6. The formula {C}{[1 - (1/(1+r)) A. Future value. B. Future value of an annuity. C. Present value of an annuity. D. Perpetuity. 7. An annuity due is a series of: A. Equal payments that occur at the beginning of each time period and continue forever. B. Equal payments that occur at the beginning of each time period for a set period of time. C. Unequal payments that occur at the end of each time period for a set period of time. D. Equal payments that occur at the end of each time period and continue forever. 8. A perpetuity is a series of payments that: A. Are equal in amount and occur over a set period of time. B. Vary in amount but occur forever. C. Vary in amount and occur over a set period of time. D. Are equal in amount and continue forever. 9. The effective annual rate is equal to: A. [1 - Quoted rate/m]/r. B. [1 - Quoted rate/m)"-1. C. [1 + Quoted rate/ml-1. D. [1 - Quoted rate/m] [r]. 10. When interest is credited the instant it is earned it is referred to as: A Simple interest B. Continuously compounded interest. C Amortized daily interest. D. Annuitized interest. 11. An annuity stream where the payments occur forever is called a(n): A. Annuity due. B. Perpetuity. C. Amortized cash flow stream D. Amortization table. 12. The interest rate expressed in terms of the interest payment made cach period is called the rate. A. Compound interest. B. Effective annual C. Periodic interest. D. Stated interest
