ACTUAL Exam Questions and CORRECT
Answers
EXPLAIN THE CASH FLOW MODEL - CORRECT ANSWER - 1. INITIAL
INVESTMENT
2. CASH FLOW OPERATION DURING THE HOLDING PERIOD (RENTAL PAYMENTS)
3. CASH FLOW FROM DISPOSITION OF SALES PROCEED
4. HOLDING PERIOD (INTEREST) EARN ON INVESTMENT
WHAT FOUR BASIC QUESTION DO THE CASH FLOW MODEL ADDRESS - CORRECT
ANSWER - 1. HOW MANY DOLLAR GO INTO THE INVESTMENT
2. WHEN DO THE DOLLAR GO INTO THE INVESTMENT
3. HOW MANY DOLLARS COME OUT OF THE INVESTMENT
4. WHEN DO THE DOLLARS COME OUT OF THE INVESTMENT
TMV TIME VALUE OF MONEY PRINCPLE - CORRECT ANSWER - 1. WHAT WILL
A N INVESTMENT MADE TODAY BE WORTH IN THE FUTURE (COMPOUNDING)
2. WHAT IS PAYMENT RECEIVED TODAY WORTH IN THE FUTURE (DISCOUNTING)
WHAT IS DISCOUNTING - CORRECT ANSWER - THE PROCESS OF
DETERMINING THE PRESENT VALUE
WHAT IS COMPOUNDING - CORRECT ANSWER - THE PROCESS OF
DETERMINING FUTURE VALUE
ANNUITY - CORRECT ANSWER - A SERIES OF EQUAL PAYMENTS OVER A
SPECIFIC PERIOD. EXAMPLES RENT OR LEASE PAYMENTS, RECURRING DEPOSIT
TO AN INTEREST-BEARING ACCOUNT