True/False Questions:

1. A lump sum can be a one-time earlier but not a one-tiime later cash flow.

2. FVs are earlier values and PVs are later values.

3. PVs are leftward on a time line and FVs are rightward on the time line.

4. FVs represent the amount that an earlier amount will grow into.

5. FVs represent what you need to invest later to have it grow into a specified earlier amount.

6. Compounding is the process used to find a PV.

7. What is discounted from the FV is the interest part to arrive at the PV.

8. With compound interest, interest is earned every period on that period's starting amount.

9. Ceteris paribus, as a debtor and for the same annual interest rate, you would prefer simple interest to compound interest.

10. There are a total of 5 variables in the basic TVM formulas.

11. The right-hand side variables in the discount rate formula represent the 3 key factors determining stock prices.

12. Ceteris paribus, the FV and the number of periods are inversely related.

13. The number of years it would take an investment to double is approximately equal to the annual interest rate divided 72.