BA323 Exam 7 Questions and Correct Answers.
The general formula for _________ is (1+quoted rate/m)^m -1
A) The APR
B) The EAR
C) The SAIR
B) The EAR (Effective Annual Rate)
What is the present value of the following cash flow stream discounted at 6% $100 In
years 1 and 2 followed by $200 in years 3 and 4?
$509.68
When entering variables in an Excell function (or in a financial calulator) the "sign
convention" can be critical to achieving a correct answer. The sign convention says
that outflows are negative values; inflows are positive values. For which variables is
this a consideration.
A) Future Value
B) Number of Periods
C) Interest Rate
D) Payment
E) Present Value
A) Future Value
D) Payment
E) Present Value
The present value of an annuity is equal to the present value of a(n) ________ annuity
multiplied by (1+r).
A) Actual
, B) Ordinary
C) Middle
D) Deferred
B) Ordinary
For a stated positive interest rate, the EAR is always _________ the APR.
A) Equal to
B) Equal to or greater than.
C) Less than
D) Equal to or less than.
E) Greater than
B) Equal to or greater than.
If the quoted interest rate is 2% per month (APR = 24%), what is the EAR?
A) 24%
B)126.82%
C) 26.82%
D) 124%
C)26.82%
1.02^12
In an excel setup of a loan amortization problem, which of the following occurs?
A) To find the dollar interest each month, you multiply the balance times the yearly
interest rate.
B)To find the new balance you subtract the dollar interest from the old balance.
C) The payment is found with the =PMT(rate, nper,-pv, fv)
D) To find the principal payment each month, you subtract the dollar interest payment
from the fixed payment.
The general formula for _________ is (1+quoted rate/m)^m -1
A) The APR
B) The EAR
C) The SAIR
B) The EAR (Effective Annual Rate)
What is the present value of the following cash flow stream discounted at 6% $100 In
years 1 and 2 followed by $200 in years 3 and 4?
$509.68
When entering variables in an Excell function (or in a financial calulator) the "sign
convention" can be critical to achieving a correct answer. The sign convention says
that outflows are negative values; inflows are positive values. For which variables is
this a consideration.
A) Future Value
B) Number of Periods
C) Interest Rate
D) Payment
E) Present Value
A) Future Value
D) Payment
E) Present Value
The present value of an annuity is equal to the present value of a(n) ________ annuity
multiplied by (1+r).
A) Actual
, B) Ordinary
C) Middle
D) Deferred
B) Ordinary
For a stated positive interest rate, the EAR is always _________ the APR.
A) Equal to
B) Equal to or greater than.
C) Less than
D) Equal to or less than.
E) Greater than
B) Equal to or greater than.
If the quoted interest rate is 2% per month (APR = 24%), what is the EAR?
A) 24%
B)126.82%
C) 26.82%
D) 124%
C)26.82%
1.02^12
In an excel setup of a loan amortization problem, which of the following occurs?
A) To find the dollar interest each month, you multiply the balance times the yearly
interest rate.
B)To find the new balance you subtract the dollar interest from the old balance.
C) The payment is found with the =PMT(rate, nper,-pv, fv)
D) To find the principal payment each month, you subtract the dollar interest payment
from the fixed payment.
