Chapter 5 Questions

1.)Present Value is?

A. How much you would get if you returned all of your Christmas presents to the WalMart

B. The Value of something in the future

C. The current "present value" of anticipated future income

D. None of the Above


2.) An Annuity is?

A. Sticky

B. An income stream characterized by equal periodic payments

C. Only happens on a leap year

D. None of the above


3.) A mortgager is?

A. A ripoff

B. A monkey

C. A real estate Lender

D. A real estate Borrower

4.) T/F NPV stands for Nice Previous Value

5.) T/F Compounding is why pepsi is better than coke

6.) T/F Discounting only happens on black Friday.

7.) T/F Amortization is the systematic reduction of debt through a series of scheduled payments

8.) T/F Time value of money is the concept that capital is entitled to a return

1.)D
2.)B
3.)D
4.)False
5.)False
6.)False
7.)True
8.)True