Corporate Finance

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  • 1/9 Questions

    Compound interest is defined as the interest earned

    • Only on the initial investment
    • On both the initial principal and all interest earned and reinvested in prior periods
    • Timing of the annuity payments
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About This Quiz

Ternmology in corporate finance

Corporate Governance Quizzes & Trivia

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  • 2. 

    The process of adding the interest earned on an investment to the original investment to the original investment in order to earn more interest is call

    • Discounting

    • Compounding

    • Future value

    Correct Answer
    A. Compounding
  • 3. 

    Which one of the following is the correct formula for computing the present value of a lump sum to be received sometime in the future

    • Fv=pv/(1+r)t

    • Pv=fv/(1+r)t

    Correct Answer
    A. Pv=fv/(1+r)t
  • 4. 

    By definition a bank that pays simple interest on a savings account will pay interest

    • Only on the initial investment

    • Only at the beginning of the investment period

    Correct Answer
    A. Only on the initial investment
  • 5. 

     What is the principal amount of a bond that is repaid at the end of the loan term called?

    • Face Value

    • Coupon

    • Accrued price

    • Dirty Price

    • Market Price

    Correct Answer
    A. Face Value
  • 6. 

    The interest rate used to compute the present value of a future cash flow is called

    • Discount rate

    • Future value

    • Present value

    • Discounting

    Correct Answer
    A. Discount rate
  • 7. 

    Which one of the following is the correct formula for the future value of a lump sum invested today

    • FV =PV/(1+r)t

    • Fv=PV x(1+r)t

    • PV=FV/(1+r)t

    Correct Answer
    A. Fv=PV x(1+r)t
  • 8. 

    The value of an investment after one or more times periods is called the

    • Present value

    • Discount rate

    • Future value

    • Compounding

    Correct Answer
    A. Future value
  • 9. 

    The current value of futyre cash flows discounted at the appropriate discount rate is call

    • Future value

    • Present value

    • Discount rate

    Correct Answer
    A. Present value

Quiz Review Timeline (Updated): Feb 13, 2013 +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Feb 13, 2013
    Quiz Edited by
    ProProfs Editorial Team
  • Feb 29, 2012
    Quiz Created by
    Bbbanks
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