Ch 5 Practice Bonos

Ch 5 Practice Bonos - 1. award: 10 out of 10 points MC Qu....

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
1. award: 10 out of 10 points MC Qu. 10 Many people who want to start investing for their future want to. .. Many people who want to start investing for their future want to start today which implies an annuity stream that is paid at the beginning of the period. Beginning-of-period cash flows are referred to as perpetuities. present values. ordinary annuities. annuities due. 2. award: 10 out of 10 points MC Qu. 11 To compute the present or future value of an annuity due, one co. .. To compute the present or future value of an annuity due, one computes the value of an ordinary annuity and then divides it by (1 + i ). divides it by (1 - i ). multiplies it by (1 - i ). multiplies it by (1 + i ). 3. award: 10 out of 10 points MC Qu. 12 When computing the future value of an annuity, the higher the co. .. When computing the future value of an annuity, the higher the compound frequency, the more likely the future value can be calculated. the less likely the future value can be calculated. the higher the future value will be. the lower the future value will be. 4.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
award: 10 out of 10 points MC Qu. 13 While the future value will increase as compounding frequency in. .. While the future value will increase as compounding frequency increases, the size of each increase in future value diminishes as compounding frequencies increase. diminishes as compounding frequencies decrease. increases as compounding frequencies increase. is independent of the compounding frequency increases. 5. award: 10 out of 10 points MC Qu. 14 Compounding monthly versus annually causes the interest rate to . .. Compounding monthly versus annually causes the interest rate to be effectively higher, and thus the future value decreases. is independent of the monthly compounding. is effected only if the calculation involves an annuity due. grows. 6. award: 10 out of 10 points MC Qu. 15 The simple form of an annualized interest rate is called the ann. .. The simple form of an annualized interest rate is called the annual percentage rate (APR). The
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 8

Ch 5 Practice Bonos - 1. award: 10 out of 10 points MC Qu....

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online