FINA 3770 exam 2 - UNT
Exam Study Guide – Practice
Questions with Answers.
GRADED A+. Latest 2026/2027
Update.
In a typical loan amortization schedule involving a consumer loan, the amount
of each loan payment is fixed.
A. True
B. False - Ans✔✔-A. True
You are purchasing a used car and will make 5 annual payments of $3,500
starting one year from today. If your funds could be invested at 9%, what is the
present value of the car?
A. $13,614
B. $17,500
C. $20,946
D. $14,839 - Ans✔✔-A. $13,614
,in finance calculator:
N= 5
I/Y= 9
PMT= -3500
FV= 0
CPT PV
You have received a share of preferred stock that pays an annual dividend of
$10. Similar preferred stock issues are yielding 22.5%. What is the value of this
share of preferred stock?
A. $46.67
B. $44.44
C. $45.67
D. $41.50 - Ans✔✔-B. $44.44
Annual dividend/yield = 10/0.225
A consol, issued by the British government to finance the Napoleonic Wars is
an example of:
A. growing annuity
B. perpetuity
C. annuity due
D. an ordinary annuity - Ans✔✔-B. perpetuity
,What is the value of this 20 year lease? The first payment, due one year from
today is $2,000 and each annual payment will increase by 4%. The discount
rate used to evaluate similar leases is 9%.
A. $68,000
B. $40,000
C. $39,856
D. $24,361 - Ans✔✔-D. $24,361
Present value of growing annuity = [P÷(r-g)]×[1-[(1+g)÷(1+r)]^n]
P is first payment
r is interest rate per period
n is number of payments
g is growth rate
= [2,000÷(.09-.05)]×[1-[(1+.05)÷(1+.09)]^20]
Which of the following is NOT a typical way in which interest rates are quoted
in the marketplace?
A. Interest rate per period
B. Effective annual interest rate (EAR)
C. Discounted interest rate
D. Quoted interest rate - Ans✔✔-C. Discounted interest rate
The Truth-in-lending Act requires borrowers to disclose the:
A. margin interest rate
B. annual percentage rate (ARP)
C. discount interest rate
, D. effective annual interest rate (EAR) - Ans✔✔-B. annual percentage rate (ARP)
Nick invested $2,000 in a bank savings account today and another $2,000 a
year from now. If the bank pays interest of 10% per year, how much money will
Nick have at the end of two years?
A. $4,200
B. $4,000
C. $4,210
D. $4,620 - Ans✔✔-D. $4,620
[PV*(1+i)^2]+[PV*(1+i)]
[2000*(1+0.10)^2]+[2000*(1+0.10)]
Anna will receive $15,000 from a bank deposit in 2 years which has an interest
rate of 3.5%. The amount of $15,000 represents the:
A. future value
B. present value of an annuity
C. future value of an annuity
D. present value - Ans✔✔-A. future value
The present value of multiple cash flows is:
A. equal to the sum of all the cash flows
B. greater than the sum of the cash flows
C. less than the sum of the cash flows
D. higher or lower than the cash flows depending on the interest rate - Ans✔✔-
C. less than the sum of the cash flows
Exam Study Guide – Practice
Questions with Answers.
GRADED A+. Latest 2026/2027
Update.
In a typical loan amortization schedule involving a consumer loan, the amount
of each loan payment is fixed.
A. True
B. False - Ans✔✔-A. True
You are purchasing a used car and will make 5 annual payments of $3,500
starting one year from today. If your funds could be invested at 9%, what is the
present value of the car?
A. $13,614
B. $17,500
C. $20,946
D. $14,839 - Ans✔✔-A. $13,614
,in finance calculator:
N= 5
I/Y= 9
PMT= -3500
FV= 0
CPT PV
You have received a share of preferred stock that pays an annual dividend of
$10. Similar preferred stock issues are yielding 22.5%. What is the value of this
share of preferred stock?
A. $46.67
B. $44.44
C. $45.67
D. $41.50 - Ans✔✔-B. $44.44
Annual dividend/yield = 10/0.225
A consol, issued by the British government to finance the Napoleonic Wars is
an example of:
A. growing annuity
B. perpetuity
C. annuity due
D. an ordinary annuity - Ans✔✔-B. perpetuity
,What is the value of this 20 year lease? The first payment, due one year from
today is $2,000 and each annual payment will increase by 4%. The discount
rate used to evaluate similar leases is 9%.
A. $68,000
B. $40,000
C. $39,856
D. $24,361 - Ans✔✔-D. $24,361
Present value of growing annuity = [P÷(r-g)]×[1-[(1+g)÷(1+r)]^n]
P is first payment
r is interest rate per period
n is number of payments
g is growth rate
= [2,000÷(.09-.05)]×[1-[(1+.05)÷(1+.09)]^20]
Which of the following is NOT a typical way in which interest rates are quoted
in the marketplace?
A. Interest rate per period
B. Effective annual interest rate (EAR)
C. Discounted interest rate
D. Quoted interest rate - Ans✔✔-C. Discounted interest rate
The Truth-in-lending Act requires borrowers to disclose the:
A. margin interest rate
B. annual percentage rate (ARP)
C. discount interest rate
, D. effective annual interest rate (EAR) - Ans✔✔-B. annual percentage rate (ARP)
Nick invested $2,000 in a bank savings account today and another $2,000 a
year from now. If the bank pays interest of 10% per year, how much money will
Nick have at the end of two years?
A. $4,200
B. $4,000
C. $4,210
D. $4,620 - Ans✔✔-D. $4,620
[PV*(1+i)^2]+[PV*(1+i)]
[2000*(1+0.10)^2]+[2000*(1+0.10)]
Anna will receive $15,000 from a bank deposit in 2 years which has an interest
rate of 3.5%. The amount of $15,000 represents the:
A. future value
B. present value of an annuity
C. future value of an annuity
D. present value - Ans✔✔-A. future value
The present value of multiple cash flows is:
A. equal to the sum of all the cash flows
B. greater than the sum of the cash flows
C. less than the sum of the cash flows
D. higher or lower than the cash flows depending on the interest rate - Ans✔✔-
C. less than the sum of the cash flows
