Annuity and Cash Flow Quiz

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to Lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is the definition of an annuity?

  • A one-time payment made at irregular intervals
  • A lump sum payment made at the end of a period
  • A sequence of payments made at equal intervals (correct)
  • A fixed amount of money to be paid over a period of time

What is the future value of an annuity?

  • The amount of money today plus incurred interest that is payable within a time period
  • The total value of all payments made at equal intervals
  • The sum of future values of all payments to be made during the entire term of the annuity (correct)
  • The value of a single payment at a particular date

How is the present value of an annuity defined?

  • The sum of future values of all payments to be made during the entire term of the annuity
  • The amount of money today plus incurred interest that is payable within a time period (correct)
  • The total value of all payments made at equal intervals
  • The value of a single payment at a particular date

How are cash inflows represented in financial calculations?

<p>As positive numbers (A)</p> Signup and view all the answers

What is the fair market value or economic value of a cash flow on a particular date?

<p>A single amount equivalent to the value of the payment stream at that date (A)</p> Signup and view all the answers

What rights do common stockholders have in a corporation?

<p>Influence how the company is run and operated (C)</p> Signup and view all the answers

What is the main characteristic of preferred stock?

<p>It has a set dividend at the time of issuance (A)</p> Signup and view all the answers

What does a stock certificate represent?

<p>The ownership in a company (C)</p> Signup and view all the answers

What is the par value of a stock?

<p>The face value of the stock as stated in the company certificate (C)</p> Signup and view all the answers

What is a bond in financial terms?

<p>An interest-bearing security that represents a loan made by an investor to a borrower (B)</p> Signup and view all the answers

What is the coupon in relation to bonds?

<p>A periodic interest payment received by bondholders (C)</p> Signup and view all the answers

What is the term or tenor of a bond?

<p>The number of years from time of purchase to maturity date (C)</p> Signup and view all the answers

What is meant by the term 'security' in financial context?

<p>The economic value of debt and equity (B)</p> Signup and view all the answers

What does the term 'frequency of conversion (m)' represent in financial calculations?

<p>Number of conversion periods in one year (B)</p> Signup and view all the answers

How would you define 'nominal rate' in financial terms?

<p>'Annual rate of interest (may be compounded more than once a year)' (B)</p> Signup and view all the answers

Flashcards are hidden until you start studying

More Like This

Future Value of Annuity Quiz
10 questions

Future Value of Annuity Quiz

WellBalancedTurtle7809 avatar
WellBalancedTurtle7809
Annuity and Payment Intervals Quiz
4 questions
Future Value and Present Value of Annuity Due
3 questions
Annuity Due: Timing and Present Value
5 questions
Use Quizgecko on...
Browser
Browser