50 Finance Multiple Choice Questions Assignment

Jul 20th, 2016
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Question Question 1 Starting to invest early for retirement increases the benefits of compound interest. True False Question 2 Which of the following statements is CORRECT, assuming positive interest rates and holding other things constant? A. Banks A and B offer the same nominal annual rate of interest, but A pays interest quarterly and B pays semiannually. Deposits in Bank B will provide the higher future value if you leave your funds on deposit. B. The present value of a 5-year, $250 annuity due will be lower than the PV of a similar ordinary annuity. C. If an investment pays 10% interest, compounded annually, its effective annual rate will be less than 10%. D. A bank loan's nominal interest rate will always be equal to or less than its effective annual rate. E. A 30-year, $150,000 amortized mortgage will have larger monthly payments than an otherwise similar 20-year mortgage. Question 3 If a firm raises capital by selling new bonds, it is called the "issuing firm," and t

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50 Finance Multiple Choice Questions AssignmentReport this Question as InappropriateQuestionQuestion 1Starting to invest early for retirement increases the benefits of compound interest.TrueFalseQuestion 2Which of the following statements is CORRECT, assuming positive interest rates and holdingother things constant?A. Banks A and B offer the same nominal annual rate of interest, but A pays interest quarterlyand B pays semiannually. Deposits in Bank B will provide the higher future value if you leaveyour funds on deposit.B. The present value of a 5-year, $250 annuity due will be lower than the PV of a similarordinary annuity.C. If an investment pays 10% interest, compounded annually, its effective annual rate will be lessthan 10%.D. A bank loan's nominal interest rate will always be equal to or less than its effective annualrate.E. A 30-year, $150,000 amortized mortgage will have larger monthly payments than anotherwise similar 20-year mortgage.Question 3If a firm raises capital by selling new bonds, it is called the "issuing firm," and the coupon rate isgenerally set equal to the required rate on bonds of equal risk.TrueFalseQuestion 4Which of the following statements is CORRECT?A. An example of an externality is a situation where a bank opens a new office, and that newoffice causes deposits in the bank's other offices to increase.B. An externality is a situation where a project would have an adverse effect on some other partof the firm's overa

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