Which of the following properly describes the present value of an ordinary annuity?

The first payment is one period after the present value.

The last payment is one period after the future value.

The first payment is on the same date as the present value.

The last payment is on the same date as the future value.

The best definition of risk averse is

never taking risks.

only taking small risks.

being compensated for taking risks.

none of the above.

Given a two-year loan of $50,000 and an annual interest rate of 8 percent, how much interest will accrue during the life of the loan? (Assume no principal payments during the term.)

$4,000

$8,000

$400

None of the above

If asset x has a standard deviation of 10 percent, and the market portfolio has a standard deviation of 20 percent, and the correlation of their returns is .5, what is the beta?

1.0

.5

.25

0

The variance is the square root of standard deviation.

True

False

Stock prices are based upon the future value of cash flows.

True

False