1 The traditional TVM calculation is appropriate when there are... a) Periodic cash flows of varying amounts occurring at irregular intervals b) Periodic cash flows of constant amounts occurring at regular intervals c) Periodic cash flows of varying amounts occurring at regular intervals d) Periodic cash flows of constant amounts occurring at irregular intervals 2 On a financial calculator, or excel, or on a cash flow diagram, what does a negative number represent... a) A cash inflow b) A cash outflow c) An uncertain cash flow d) A cash flow which occurs in the future 3 If you solve for the interest rate, i, this is the same as solving for... a) The NPV b) The IRR c) The PMT d) The After-Tax Return on Capital 4 For a given set of cash flows occurring in the future, if i goes up, the PV will... a) Go down b) Go up c) PV is not directly related to i d) Buy low, sell high 5 If a bond matures in 10 years and pays coupons semi-annually, then "n" on a financial calculator (or NPER in Excel) will be... a) 2 b) 10 c) 20 d) 5 6 Normally a "dollar today is worth more than a dollar in the future". But, if interest rates are negative... a) "A dollar today is still worth more than a dollar in the future" b) "A dollar today is worth the same as a dollar in the future" c) "A dollar today is worth less than a dollar in the future" d) In the presence of negative interest rates, there is no way to compare dollars today and the future. 7 Which investment would offer the highest effective interest rate... a) 8% compounded annually b) 8% compounded semi-annually c) 8% compounded quarterly d) 8% compounded monthly 8 Which investment will have a PV that is most sensitive to changes in interest rates... a) A 1yr UST Bill b) A 5yr UST Bond c) A 20yr UST Bond d) A 30yr UST Bond