Y
AGEC 4040 OLD TEST ()
WITH QUESTIONS AND VERIFIED
ANSWERS, 100% GUARANTEE PASS
In comparing an ordinary annuity and an annuity due, which of the following is true
A) the future value of an ordinary annuity is always greater than the future value of an otherwise
identical annuity due
B) all things being equal one would prefer to receive an ordinary annuity compared to an annuity due
C) the future value of an annuity due is always greater than the future value of an otherwise indentical
ordinary annuity
D) the future value of an annuity due is always less than the future value of an otherwise identical
ordinary annuity since one less payment is receive with an annuity due - Correct answer.C) the future
value of annuity due is aleays greater than the future value of an otherwise identical ordinary annuity
The future value of a dollar ________ as the interest rate increases and ________ the farther in the
future is the funds are to be received.
a. decreases; decreases.
b. decreases; increases.
c. increases; increases.
d. increases; decreases. - Correct answer.D) increases; decreases
_______ rate of interest creates equilibrium between the supply of savings and the demand for
investment funds
A) inflationary
B) risk free
C) real
D) nominal - Correct answer.C) real
,Generally an increase in risk will result in_______. Hint use TVM basic formulas
A) a lower return on investment
B) a higher required return or interest rate
C) a lower required return or interest rate
D) a higher return on investment - Correct answer.D) a higher return on investment
________ rate of interest is actual rate charged by the supplier and paid by the demanded of funds
A) risk free
B) nominal
C) real
D) inflationary - Correct answer.B) nominal
A _______ is a graphic depiction between the maturity and rate of return for bonds with similar risks
A) risk return profile
B) yield curve
C) aggregate demand curve
D) supply function - Correct answer.B) yield curve
A_______ yield curve reflects higher expected future rates of interest
A) linear
B) downward sloping
C) upward sloping
D) flat - Correct answer.C) upward sloping
The key inputs to the valuation process include ______ hint think of most complete description
, A) returns and risk
B) cash flows and discount rate
C) returns, discount rate, and risk
D) cash flow, cash flow timing, and risk - Correct answer.D) cash flow, cash flow timing, and risk
The value of any asset is the
A) sum of all future cash flows it is expected to provide over the relevant time period
B) present value of the sum of all future cash flows it is expected to provide over the relevant time
period
C) sum of all compounded future cash flows it is expected to provide over the relevant time period
D) sum of the present values of all future cash flows it is expected to provide over the relevant time
period - Correct answer.B) present value of the sum of all future cash flows it is expected to provide over
the relevant time period
The basic valuation model, risk is generally incorporated into the
A) cash flows
B) discount rate
C) timing
D) total value - Correct answer.A) cash flows
A type of long term financing used by both corporation and governments entities is
A) retained earnings
B) bonds
C) common stock
D) preferred stock - Correct answer.B) bonds
AGEC 4040 OLD TEST ()
WITH QUESTIONS AND VERIFIED
ANSWERS, 100% GUARANTEE PASS
In comparing an ordinary annuity and an annuity due, which of the following is true
A) the future value of an ordinary annuity is always greater than the future value of an otherwise
identical annuity due
B) all things being equal one would prefer to receive an ordinary annuity compared to an annuity due
C) the future value of an annuity due is always greater than the future value of an otherwise indentical
ordinary annuity
D) the future value of an annuity due is always less than the future value of an otherwise identical
ordinary annuity since one less payment is receive with an annuity due - Correct answer.C) the future
value of annuity due is aleays greater than the future value of an otherwise identical ordinary annuity
The future value of a dollar ________ as the interest rate increases and ________ the farther in the
future is the funds are to be received.
a. decreases; decreases.
b. decreases; increases.
c. increases; increases.
d. increases; decreases. - Correct answer.D) increases; decreases
_______ rate of interest creates equilibrium between the supply of savings and the demand for
investment funds
A) inflationary
B) risk free
C) real
D) nominal - Correct answer.C) real
,Generally an increase in risk will result in_______. Hint use TVM basic formulas
A) a lower return on investment
B) a higher required return or interest rate
C) a lower required return or interest rate
D) a higher return on investment - Correct answer.D) a higher return on investment
________ rate of interest is actual rate charged by the supplier and paid by the demanded of funds
A) risk free
B) nominal
C) real
D) inflationary - Correct answer.B) nominal
A _______ is a graphic depiction between the maturity and rate of return for bonds with similar risks
A) risk return profile
B) yield curve
C) aggregate demand curve
D) supply function - Correct answer.B) yield curve
A_______ yield curve reflects higher expected future rates of interest
A) linear
B) downward sloping
C) upward sloping
D) flat - Correct answer.C) upward sloping
The key inputs to the valuation process include ______ hint think of most complete description
, A) returns and risk
B) cash flows and discount rate
C) returns, discount rate, and risk
D) cash flow, cash flow timing, and risk - Correct answer.D) cash flow, cash flow timing, and risk
The value of any asset is the
A) sum of all future cash flows it is expected to provide over the relevant time period
B) present value of the sum of all future cash flows it is expected to provide over the relevant time
period
C) sum of all compounded future cash flows it is expected to provide over the relevant time period
D) sum of the present values of all future cash flows it is expected to provide over the relevant time
period - Correct answer.B) present value of the sum of all future cash flows it is expected to provide over
the relevant time period
The basic valuation model, risk is generally incorporated into the
A) cash flows
B) discount rate
C) timing
D) total value - Correct answer.A) cash flows
A type of long term financing used by both corporation and governments entities is
A) retained earnings
B) bonds
C) common stock
D) preferred stock - Correct answer.B) bonds
