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Questions and Answers
What does the future value of an annuity measure?
What does the future value of an annuity measure?
- The future worth of a series of cash flows (correct)
- The average worth of a series of cash flows
- The present worth of a series of cash flows
- The maximum worth of a series of cash flows
How are present value and future value related?
How are present value and future value related?
- The present value is always higher than the future value
- The future value is not related to the present value
- The future value of a series of cash flows also has a present value (correct)
- The present value cannot be calculated
In what scenario would an investor try to solve for the future value?
In what scenario would an investor try to solve for the future value?
- When solving for the present value of a future amount needed
- When buying a stock today with a known dividend yield (correct)
- When calculating the present value of an investment
- When the future value is not relevant in investment decisions
What can be solved for if an individual wants to have a specific future value on hand for a down payment next year?
What can be solved for if an individual wants to have a specific future value on hand for a down payment next year?
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What is the relationship between present value and future value in terms of cash flows?
What is the relationship between present value and future value in terms of cash flows?
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What is the relationship between present value and future value in terms of cash flows?
What is the relationship between present value and future value in terms of cash flows?
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In what scenario would an investor try to solve for the future value?
In what scenario would an investor try to solve for the future value?
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What can be solved for if an individual wants to have a specific future value on hand for a down payment next year?
What can be solved for if an individual wants to have a specific future value on hand for a down payment next year?
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What does the future value of an annuity measure?
What does the future value of an annuity measure?
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How are present value and future value related?
How are present value and future value related?
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