Acta GELA Score- -Re: 8. Whis section B: MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1. A dollar today is worth more than a dollar to be received in the future because: A) a dollar today is not worth more than a dollar to be received in the future. B) risk of nonpayment in the future. C) the dollar can be invested today and earn interest. D) inflation will reduce purchasing power of a future dollar. 2. An annuity may be defined as: A) a series of consecutive payments or receipts of equal amounts. B) a series of payments of unequal amount. C) a payment at a fixed interest rate. D) a series of yearly payments. 3. As the interest rate increases the present value of an amount to be received at the end of a fixed period: A) remains the same. B) decreases. C) increases. D) not enough information to tell. 4. Valuation of financial assets requires knowledge of: A) future cash flows. B) past asset performance. C) appropriate discount rate. D) future cash flows and appropriate discount rate. 5. The market allocates capital to companies based on: A) effectiveness. B) need. C) risk. D) previous returns. 6. The relationship between a bond's price and the yield to maturity: A) is a linear relationship. B) changes at a constant level for each percentage change of yield to maturity and is an inverse relationship. C) is an inverse relationship. D) changes at a constant level for each percentage change of yield to maturity. 7. The value of a common stock is based on its A) past performance. B) future benefits to the holder. C) divided yield. D) B) current earnings