Present value of calculations do which of the following? a. Compound all future cash flows into the future b. Compound all future cash flows back to the present c. Discount all future cash flows back to the present d. Discount all future cash flows into the future.
To determine the interest paid each compounding period, we take the advertised annual percentage rate and simply divide it by the _____ to appropriate periodic interest rate. a. number of compounding periods for the length of an investment b. number of discounting periods for the length of an investment c. number of compounding periods per year. d. number of compounding periods per month.
Monthly interest on a loan is equal to a. the beginning balance times the APR. b. the ending balance times the annual percentage rate. c. the ending balance times the periodic interest rate. d. the beginning balance times the periodic interest rate.
The appropriate rate to use to discount the cash flows of a bond in order to determine the current price is the: a. yield to maturity b. coupon rate c. par rate. d. current yield
You want to invest in a stock that pay $5 annual cash dividend for the next four years. At the end of four years, you will sell the stock for $20. If you want to earn 12% on this investment, what is a fair price for this stock if you buy it today? a. $40 b. $43.90 c. $27.90 d. $25.42
The security market line: a. is curvilinear and upward sloping. b. is curvilinear and downward sloping c. may curve up or down depending upon market conditions. d. is a straight line.