Chapter 5 Multiple Choice/True or False Questions

Multiple Choice
1) The process of determining the future value of an income stream is called what?

1. Compounding
2. Time Value of Money
3. Present Value
4. Discounting

2) The process of determining the present value of an income stream is called what?

1. Future Value
2. Net Present Value
3. Discounting
4. Compounding

3) The systematic reduction of debt through a series of scheduled principal repayments that lead to the complete extinction of the loan is known as what?

1. Annuity
2. Internal Rate of Return (IRR)
3. Net Present Value
4. Amortization

True or False
1) The value an anticipated future income stream enjoys at the present is known as present value.

2) A specific type of income stream characterized by different periodic payments over its life is known as an annuity.

3) A mortgagor is a real estate lender.

4) The portion of investment cash inflow designated as the repayment of invested capital is known as return on.

5) The amortization schedule is a table that shows all payments made over the life of a loan.




Answers
Multiple Choice
1) Compounding
2) Discounting
3) Amortization
True or False
1) True
2) False, The periodic payments are the same
3) False, Real estate borrower
4) False, Return of
5) True