1.

Compounding is the process of finding the future value of some present amount.

Select one:

True

False

2.

A firm must make its dividend payments common shareholders before it makes any dividend payments to its preferred shareholders.

Select one:

True

False

3.

As long as the interest rate is greater than zero, the present value of a single sum will always:

Select one:

a. Decrease as the number of periods decreases.

b. Equal the future value if the time period is one year.

c. Decrease as the interest rate increases.

d. Increase as the number of periods increases.

e. Be more than the future value

4.

Bond ratings issued by DBRS specifically account for inflation risk.

Select one:

True

False

5.

A financial lease is usually a longer-term lease in which the lessee is responsible for insurance, taxes, and upkeep.

Select one:

True

False

6.

The bank quotes 2.5% for 3 year mortgages. This is a nominal rate.

Select one:

True

False