2201AFE_Tutorial_03

2201AFE_Tutorial_03 - 2201AFE Corporate Finance TOPIC:...

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TOPIC: Discounted Cash Flow Valuation 10 Multiple-Choice Questions 1. An annuity stream of cash flow payments is a set of: a. level cash flows occurring each time period for a fixed length of time. b. level cash flows occurring each time period forever. c. increasing cash flows occurring each time period for a fixed length of time. d. increasing cash flows occurring each time period forever. e. arbitrary cash flows occurring each time period for no more than 10 years. 2. An annuity stream where the payments occur forever is called a(n): a. annuity due. b. indemnity. c. perpetuity. d. amortized cash flow stream. e. amortization table. 3. The interest rate expressed as if it were compounded once per year is called the _____ rate. a. stated interest b. compound interest c. effective annual d. periodic interest e. daily interest 4. The interest rate charged per period multiplied by the number of periods per year is called the _____ rate. a. effective annual b. annual percentage c. periodic interest d. compound interest e. daily interest 5. A loan where the borrower receives money today and repays a single lump sum at some time in the future is called a(n) _____ loan. a. amortized
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This note was uploaded on 10/10/2010 for the course ECON 7300 at University of Sydney.

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2201AFE_Tutorial_03 - 2201AFE Corporate Finance TOPIC:...

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