Principles of Finance Test Bank – Chapter 7 (Ch7)finance chapter 7 test bank valuation finance questions corporate finance practice finance exam preparation financial management notes

PrinciplesofFinance-TestBank-Ch7.docx!!!!!!!!!!!!!!!! PrinciplesofFinance-TestBank-Ch7.docx PrinciplesofFinance-TestBank-Ch7.docx
TEST BANK
Principles of Finance


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PrinciplesofFinance-TestBank-Ch7.docx 4/20/2026, 2:15:29 PM PrinciplesofFinance-TestBank-Ch7.docx

, PrinciplesofFinance-TestBank-Ch7.docx!!!!!!!!!!!!!!!! PrinciplesofFinance-TestBank-Ch7.docx PrinciplesofFinance-TestBank-Ch7.docx



Principles of Finance



Chapter 7
Test Bank
Time Value of Money I: Single Payment Value

These questions and problems can all be solved in a classroom setting using a handheld
financial calculator.

True or False Questions
1. Compounding a present value into the future at a zero-interest rate will generate a future
value that is equal to its present value.
A. True
B. False
Section 7.2 LO 2 Easy
2. If one switches to a higher interest rate in discounting a future value, the result will be a
smaller present value.
A. True
B. False
Section 7.3 LO 2 Easy
3. If there is no compounding within a year, a nominal interest rate will be equal to the effective
interest rate.
A. True
B. False
Section 7.3 LO 3 Easy
4. The Fisher equation states that investors ignore inflation in assessing the rate of return that
they get from an investment.
A. True
B. False
Section 7.4 LO 2 Easy




03/30/22 2


PrinciplesofFinance-TestBank-Ch7.docx 4/20/2026, 2:15:29 PM PrinciplesofFinance-TestBank-Ch7.docx