Understanding Stock Market Investments

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Questions and Answers

Which of the following is NOT an example of annuities?

Educational plan
Pension
Deposit (correct)
Car loan

Which of the following situations is an example of a general annuity?

P5,000 deposited every month for 5 years at 8% per year compounded annually (correct)
P5,000 deposited every three months for 5 years at 8% per year compounded quarterly
P5,000 deposited every year for 5 years at 8% per year compounded annually
P5,000 deposited every six months for 5 years at 8% per year compounded semi-annually

Which of the following situations is NOT an example of simple annuity?

P1,500 deposited every month for 15 years at 10% per year compounded monthly
P1,500 deposited every six months for 15 years at 10% per year compounded semi-annually
P1,500 deposited every three months for 15 years at 10% per year compounded quarterly
P1,500 deposited every month for 15 years at 10% per year compounded annually (correct)

What is the present value of the simple annuity of P 5,000.00 payable semi-annually for 15 years if money is worth 6% compounded semi-annually?

P74,387.37 (C) Signup and view all the answers

Which of the following describes a characteristic of a general annuity?

Payments are made at the end of each period at a fixed rate (B) Signup and view all the answers

Why do people typically buy stocks?

They expect to earn a return (A) Signup and view all the answers

What best describes a bond?

A corporate or government debt obligation (C) Signup and view all the answers

What is the purpose of a stock market index?

To serve as a benchmark for stock performance (C) Signup and view all the answers

What type of loan is intended for personal, family, or household purposes?

Consumer loan (C) Signup and view all the answers

What is the primary function of a guarantor?

To guarantee payment for another's debt (B) Signup and view all the answers

How much will Lito pay as a down payment for a car costing P400,000 with a 10% requirement?

P40,000 (A) Signup and view all the answers

Which of the following sentences qualifies as a proposition?

It is raining outside. (C) Signup and view all the answers

Which describes a compound proposition?

It is made up of simple propositions joined by logical connectors. (A) Signup and view all the answers

Which of the following does not represent a logical connector?

Moreover (C) Signup and view all the answers

What compound proposition can be formed from 'You are what you eat' and 'Your food can describe your health'?

If you are what you eat, then your food can describe your health. (B) Signup and view all the answers

Which of the following may never describe a proposition?

Logical proposition (B), Connective proposition (C) Signup and view all the answers

What is the truth value of a false proposition?

False (B) Signup and view all the answers

Which of the following shows a correct proposition?

Either true or false. (A) Signup and view all the answers

Which logical operator uses the connector 'and'?

Conjunction (A) Signup and view all the answers

Which denotes biconditional?

p ↔ q (A) Signup and view all the answers

What is the formula for calculating simple interest?

I = P * r * t (D) Signup and view all the answers

Which of the following statements describes compound interest?

Interest is reinvested for calculating future interest. (A) Signup and view all the answers

If an investment has a principal of P20,000, an annual interest rate of 5%, and is held for 3 years, what is the future value using simple interest?

P23,000 (D) Signup and view all the answers

What does the variable 'n' represent in compound interest calculations?

Number of conversion periods (A) Signup and view all the answers

When calculating the present value, which of the following factors is NOT considered?

Investment risks (B) Signup and view all the answers

How is the future value calculated for compound interest?

A = P(1 + i)^n (D) Signup and view all the answers

What is considered a certain annuity?

An annuity with guaranteed payments for a certain number of years. (B) Signup and view all the answers

What formula can be used to determine the future value of an investment in simple interest?

F = P(1 + rt) (C) Signup and view all the answers

Flashcards

Stock Purpose

People buy stocks expecting to earn a return.

Bond Definition

A bond represents a debt obligation of a corporation or government.