Monday, February 25, 2013

Chapter 5 By Albert Chang

1) Compounding is the process of determining the future value of an income stream by applying appropriate time value of money concepts. (T/F)

2)Present Value is the virtue of the power of money to earn interest, the value that an income-producing asset will enjoy at specific time in the future.(T/F)

3)The Internal rate of return is the rate return that exactly equates the investment outflows without the investment inflows.(T/F)

4)NPV stands for No Present Value (T/F)
5)Amortization is the systematic reduction of debt through a series of scheduled principal repayments that lead eventually to complete extinction of loan. (T/F)

6) What is Annuity?
a) specific type of income stream by equal periodic payemnts
b) the pay of a lump sum in a year
c) Pay twice a year
d) all the above

7)A real estate lender is
a) Mortgagor
b) Mortgagee
c) Mortgage
d) All the above

8)What is time value of money?
a) A portion investment of cash inflow
b) A real estate borrower
c) the concept developed around the argument that capital is entitled to a return
d) all the above

1)T 2)F 3)F 4)F 5)T 6)A 7)B 8)C

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