1a.The Time Value of Money

a.Is about doubling the future value to get the present value.

b.Is about present value increasing to future value at some rate over some number of years.

c.is not used much anymore since we have EXCEL and calculators.

d.is not important to banking in the twenty first century.

e.None of the above

1b.ABC Company anticipates constant 4% growth in a market that expects 6% on investments. ABC currently sells for $89.00 per share. What would you expect their next dividend to be?

a.$4.16

b.$3.75

c.$3.19

d.$2.00

e.$1.78

1c. A 12% loan with monthly payments for 30 years

a.Would have 330 payments.

b.Would have a rate of 1% per month.

c.Would have payments greater than $1,000 each.

d.Would be difficult to pay off in 30 years.

e.Would have payments twice a year.