Question 1

When determining the future values of cash flows are used.

Group of answer choices

Accounting returns

Interest rates

Compound sums

Discount rates

Question 2

The time value of money plays an important role in which of the following:

Group of answer choices

understanding the composition of a mortgage payment.

determining the true rate of return on an investment.

all apply

understanding the effective rate on a business loan.

Question 3

The rate at which we expect our investments to grow expressed in annual growth is the .

Group of answer choices

principal

compound sum

present value

interest rate

Question 4

Investments that have less consistent returns are considered riskier.

Group of answer choices

True

False

Question 5

Two important measures when evaluating risk and return are:

Group of answer choices

Standard Deviation and Mode

Mean and Standard Deviation

Median and Mode

Mean and Median

Question 6

When determining the present value of future cash flows, discount rates are used.

Group of answer choices

True

False

Question 7

The is used to estimate the expected return.

Group of answer choices

Median

Standard Deviation

Mode

Mean

Flag question: Question 8Question 81 pts

Standard Deviation is used to measure .

Group of answer choices

Revenue

Present Value

Risk

Return

Question 9

The smaller the standard of deviation, the more dispersed the returns are.

Group of answer choices

True

False

Question 10

is the act of investing in multiple companies so that the poor performance of a single company will not have a significant impact on the investor.

Group of answer choices

Amortization

Discounting

Capitalization

Diversification

Question 11

Which one of the following stocks is considered riskier?

Stock	Standard Deviation	Mean
ABC	16.6%	12.8%
XYZ	11.5%	10.9%

Group of answer choices

ABC because the mean is higher.

ABC because the standard deviation is higher.

XYZ because the standard deviation is lower.

XYZ because the mean is lower.

Question 12

The lower the discount rate, the less the future investments anticipated cash flows are valued at.

Group of answer choices

True

False

Question 13

When determining the future value (FV) of an investment, the interest rate (i) is compounded over a certain number of years (n).

Group of answer choices

True

False

Question 14

When determining the present value (PV) of an investment, the discount rate (i) is discounted over a number of years (n).

Group of answer choices

True

False

Question 15

The risk that can be eliminated by diversification is called risk.

Group of answer choices

Nonsystematic

Discount

Systematic

Market