Midterm Exam:
You are viewing a graph that plots the NPVs of a project to various discount rates
that could be applied to the project's cash flows. What is the name given to this
graph?
NPV Profile
An investment offers a total return of 12.4 percent over the coming year. You
believe the total real return will be only 9.7 percent. What do you believe the exact
inflation rate will be for the next year?
2.46 percent
The interest rate that is most commonly quoted by a lender is referred to as which
one of the following:
Simple rate
Which one of the following terms is defined as a loan wherein the regular
payments, including both interest and principal amounts, are insufficient to retire
the entire loan amount, which then must be repaid in one lump sum?
Balloon loan
You are investing $100 today in a savings account at your local bank. Which one
of the following terms refers to the value of this investment one year from now?
Future Value
What is the net present value of a project that has an initial cash outflow of
$36,300 and cash inflows of $11,500, $21,700, $0, and $10,400 in Years 1 through
4, respectively? The required return is 15 percent.
($3945.45)
At 6 percent interest, how long would it take to quadruple your money?
23.79 years
You just received a $5,000 gift from your grandmother. You have decided to save
this money so that you can gift it to your grandchildren 50 years from now. How
much additional money will you have to gift to your grandchildren if you can earn
an average of 7.5 percent instead of just 7 percent on your savings?
$38,663.60
A premium bond that pays $60 in interest annually matures in seven years. The
bond was originally issued three years ago at par. Which one of the following
This study source was downloaded by 100000839495789 from CourseHero.com on 06-15-2022 06:12:00 GMT -05:00
https://www.coursehero.com/file/15076230/Midterm-Exam/
You are viewing a graph that plots the NPVs of a project to various discount rates
that could be applied to the project's cash flows. What is the name given to this
graph?
NPV Profile
An investment offers a total return of 12.4 percent over the coming year. You
believe the total real return will be only 9.7 percent. What do you believe the exact
inflation rate will be for the next year?
2.46 percent
The interest rate that is most commonly quoted by a lender is referred to as which
one of the following:
Simple rate
Which one of the following terms is defined as a loan wherein the regular
payments, including both interest and principal amounts, are insufficient to retire
the entire loan amount, which then must be repaid in one lump sum?
Balloon loan
You are investing $100 today in a savings account at your local bank. Which one
of the following terms refers to the value of this investment one year from now?
Future Value
What is the net present value of a project that has an initial cash outflow of
$36,300 and cash inflows of $11,500, $21,700, $0, and $10,400 in Years 1 through
4, respectively? The required return is 15 percent.
($3945.45)
At 6 percent interest, how long would it take to quadruple your money?
23.79 years
You just received a $5,000 gift from your grandmother. You have decided to save
this money so that you can gift it to your grandchildren 50 years from now. How
much additional money will you have to gift to your grandchildren if you can earn
an average of 7.5 percent instead of just 7 percent on your savings?
$38,663.60
A premium bond that pays $60 in interest annually matures in seven years. The
bond was originally issued three years ago at par. Which one of the following
This study source was downloaded by 100000839495789 from CourseHero.com on 06-15-2022 06:12:00 GMT -05:00
https://www.coursehero.com/file/15076230/Midterm-Exam/
