Time Value Of Money(Financial Management And Financial Markets ) Questions and Answers

Question 1. The prices of bonds will be decreased if an interest rates
  1.    rises
  2.    declines
  3.    equals
  4.    none of above
Explanation:-
Answer: Option A. -> rises
Answer: (a).rises
Question 2. The right side of the balance sheet states the
  1.    appreciated earnings
  2.    liabilities
  3.    assets
  4.    stocks earnings
Explanation:-
Answer: Option C. -> assets
Answer: (c).assets
Question 3. The wages and salaries of employees which company owns in this accounts are called
  1.    accrued expenses
  2.    accruals accounts
  3.    both a and b
  4.    zero liabilities
Explanation:-
Answer: Option C. -> both a and b
Answer: (c).both a and b
Question 4. The securities future value is $1,000,000 and the present value of securities is $500,000 with an interest rate of 4.5%, the 'N' will be
  1.    16.7473 years
  2.    0.0304 months
  3.    15.7473 years
  4.    0.7575 years
Explanation:-
Answer: Option C. -> 15.7473 years
Answer: (c).15.7473 years
Question 5. If the payment of security is paid as $100 at the end of year for three years, it is an example of
  1.    fixed payment investment
  2.    lump sum amount
  3.    fixed interval investment
  4.    annuity
Explanation:-
Answer: Option D. -> annuity
Answer: (d).annuity
Question 6. The payment of security if it is made at the end of each period such as beginning of the year is classified as
  1.    annuity due
  2.    payment fixed series
  3.    ordinary annuity
  4.    deferred annuity
Explanation:-
Answer: Option A. -> annuity due
Answer: (a).annuity due
Question 7. The value of payment is $25 and an interest rate is 2%, then the present value will be
  1.    12.5 dollars
  2.    0.0008 dollars
  3.    1,250 dollars
  4.    0.8 dollars
Explanation:-
Answer: Option C. -> 1,250 dollars
Answer: (c).1,250 dollars
Question 8. The collection of net income, amortization and depreciation is divided by common shares outstanding to calculate
  1.    cash flow of financing activities
  2.    cash flow per share
  3.    cash flow of investment
  4.    cash flow of operations
Explanation:-
Answer: Option B. -> cash flow per share
Answer: (b).cash flow per share
Question 9. The net worth is also called
  1.    asset net of liabilities
  2.    liabilities net of assets
  3.    earnings net on assets
  4.    liabilities net of earnings
Explanation:-
Answer: Option A. -> asset net of liabilities
Answer: (a).asset net of liabilities
Question 10. An annual rate of 16% if quoted by credit card issuer usually a bank is classified as
  1.    loan rate of return
  2.    local rate of return
  3.    annual percentage rate
  4.    annual rate of return
Explanation:-
Answer: Option C. -> annual percentage rate
Answer: (c).annual percentage rate
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