Corporate Finance
9 Questions
| Attempts: 293
Ternmology in corporate finance
Questions and Answers
- 1.
What is the principal amount of a bond that is repaid at the end of the loan term called?
- A.
Face Value
- B.
Coupon
- C.
Accrued price
- D.
Dirty Price
- E.
Market Price
Correct Answer
A. Face Value -
- 2.
The value of an investment after one or more times periods is called the
- A.
Present value
- B.
Discount rate
- C.
Future value
- D.
Compounding
Correct Answer
C. Future value -
- 3.
Compound interest is defined as the interest earned
- A.
Only on the initial investment
- B.
On both the initial principal and all interest earned and reinvested in prior periods
- C.
Timing of the annuity payments
Correct Answer
B. On both the initial principal and all interest earned and reinvested in prior periods -
- 4.
By definition a bank that pays simple interest on a savings account will pay interest
- A.
Only on the initial investment
- B.
Only at the beginning of the investment period
Correct Answer
A. Only on the initial investment -
- 5.
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
- A.
Discounting
- B.
Compounding
- C.
Future value
Correct Answer
B. Compounding -
- 6.
Which one of the following is the correct formula for the future value of a lump sum invested today
- A.
FV =PV/(1+r)t
- B.
Fv=PV x(1+r)t
- C.
PV=FV/(1+r)t
Correct Answer
B. Fv=PV x(1+r)t -
- 7.
The current value of futyre cash flows discounted at the appropriate discount rate is call
- A.
Future value
- B.
Present value
- C.
Discount rate
Correct Answer
B. Present value -
- 8.
The interest rate used to compute the present value of a future cash flow is called
- A.
Discount rate
- B.
Future value
- C.
Present value
- D.
Discounting
Correct Answer
A. Discount rate -
- 9.
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
- A.
Fv=pv/(1+r)t
- B.
Pv=fv/(1+r)t
Correct Answer
B. Pv=fv/(1+r)t -
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Feb 13, 2013Quiz Edited by
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Feb 29, 2012Quiz Created by
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