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Instructions: Read each statement below carefully. Place a T on the line if you think a statement it TRUE. Place an F on the line
Instructions: Read each statement below carefully. Place a T on the line if you think a statement it TRUE. Place an F on the line if you think the statement is FALSE 1. The rate of exchange between certain future dollars and certain current dollars is known as the pure rate of interest. 2. An investment is the current commitment of dollars over time to derive future payments to compensate the investor for the time funds are committed, the expected rate of inflation and the uncertainty of future payments. 3. A dollar received today is worth less than the same dollar received in the future 4. The three components of the required rate of return are the nominal interest rate, an inflation premium, and a risk premium 5. Participants in primary capital markets that gather funds and channel them to borrowers are called financial intermediaries. 6. Diversification with foreign securities can help reduce portfolio risk. 7. The total domestic return on German bonds is the return that would be experienced by a U.S. investor who owned German bonds. 8. If the exchange rate effect for Japanese bonds is negative, it means that the domestic rate of return will be greater than the U.S. dollar return. 9. The gifting phase is similar to, and may be concurrent with, the spending phase. 10. Long-term, high-priority goals include some form of financial independence
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