FIN 534 Week 4 Quiz 3
A quiz assessing financial concepts and market strategies.
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FIN 534 Week 4 quiz 3
Question 1
Which of the following statements is CORRECT?
Correct
Answer:
Time lines are useful for visualizing complex problems prior to doing actual
calculations.
Question 2
Which of the following statements regarding a 30-year monthly payment amortized mortgage
with a nominal interest rate of 10% is CORRECT?
Correct
Answer:
A larger proportion of the first monthly payment will be interest, and a smaller
proportion will be principal, than for the last monthly payment.
Question 3
A U.S. Treasury bond will pay a lump sum of $1,000 exactly 3 years from today. The nominal
interest rate is 6%, semiannual compounding. Which of the following statements is CORRECT?
Correct
Answer:
The PV of the $1,000 lump sum has a smaller present value than the PV of a 3-
year, $333.33 ordinary annuity.
Question 4
You plan to analyze the value of a potential investment by calculating the sum of the present
values of its expected cash flows. Which of the following would increase the calculated value of
the investment?
Correct Answer: The discount rate decreases.
Question 5
Question 1
Which of the following statements is CORRECT?
Correct
Answer:
Time lines are useful for visualizing complex problems prior to doing actual
calculations.
Question 2
Which of the following statements regarding a 30-year monthly payment amortized mortgage
with a nominal interest rate of 10% is CORRECT?
Correct
Answer:
A larger proportion of the first monthly payment will be interest, and a smaller
proportion will be principal, than for the last monthly payment.
Question 3
A U.S. Treasury bond will pay a lump sum of $1,000 exactly 3 years from today. The nominal
interest rate is 6%, semiannual compounding. Which of the following statements is CORRECT?
Correct
Answer:
The PV of the $1,000 lump sum has a smaller present value than the PV of a 3-
year, $333.33 ordinary annuity.
Question 4
You plan to analyze the value of a potential investment by calculating the sum of the present
values of its expected cash flows. Which of the following would increase the calculated value of
the investment?
Correct Answer: The discount rate decreases.
Question 5
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Document Details
University
Strayer University
Subject
Finance