Test 2 (Ch 4)

Test 2 (Ch 4) - 1. award: 10 out of 10 points MC Qu. 1...

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1. award: 10 out of 10 points MC Qu. 1 Which of the following is not true when developing a time line? Which of the following is not true when developing a time line? Cash outflows are designated with a positive number. The time line shows the magnitude of cash flows at different points in time. The cost is known as the interest rate. Cash inflows are designated with a positive number. 2. award: 10 out of 10 points MC Qu. 2 People borrow money because they expect. .. People borrow money because they expect… their purchases to give them the satisfaction in the future that compensates them for the interest payments charged on the loan. consumers don't need to calculate the impact of interest on their purchases. the time value of money to only apply if they are saving money. interest rates to rise. 3. award: 10 out of 10 points MC Qu. 6 We call the process of earning interest on both the original dep. .. We call the process of earning interest on both the original deposit and on the earlier interest payments: multiplying. compounding. discounting. computing. 4.
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award: 10 out of 10 points MC Qu. 7 Interest earned on the original deposit is called: Interest earned on the original deposit is called: compound interest. computed interest. discount interest. simple interest. 5. award: 0 out of 10 points MC Qu. 8 The process of figuring out how much an amount that you expect t. .. The process of figuring out how much an amount that you expect to receive in the future is worth today is called: compounding. multiplying. discounting. computing. 6. award: 10 out of 10 points MC Qu. 10 Who is credited with popularizing the Rule of 72? Who is credited with popularizing the Rule of 72? Benjamin Franklin Albert Einstein Bill Nye, The Science Guy Ben Stein 7. award: 10 out of 10 points
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MC Qu. 14 A dollar paid (or received) in the future is A dollar paid (or received) in the future is not worth as much as a dollar paid (or received) today. not comparable to a dollar paid (or received) today. worth as much as a dollar paid (or received) today. worth more than a dollar paid (or received) today. 8. award: 10 out of 10 points MC Qu. 20 The longer money can earn interest, The longer money can earn interest, the greater the compounding effect. the greater the present value must be to reach a financial goal. the greater the interest earned on the original deposit exceeds the interest-on-interest. the greater the risk to the investor of not reaching a financial goal.
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Test 2 (Ch 4) - 1. award: 10 out of 10 points MC Qu. 1...

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