FIN 210 FIN210 Week 2 QUIZ Answers (Indiana)

FIN 210 FIN210 Week 2 QUIZ Answers (Indiana)

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FIN 210 Week 2 QUIZ (Indiana)

1. Semiannual compounding is compounding of interest over two periods within the year. (Points : 5) 

Question 2.2. A mixed stream of cash flows is a stream of cash flows that is not an annuity; a stream of unequal cash flows that reflect no particular pattern. (Points : 5) 

Question 3.3. An annuity is a stream of unequal cash flows. (Points : 5) 

Question 4.4. Discounting cash flows is the inverse of compounding interest. (Points : 5) 

Question 5.5. Present value is the current dollar value of a future amount. (Points : 5) 

Question 6.6. The more frequently interest is compounded, the greater the amount of money is accumulated. (Points : 5) 

Question 7.7. The nominal (stated) annual rate is the contractual rate of interest charged by a lender or promised by a borrower. (Points : 5) 

Question 8.8. Discounting cash flows is the process of finding present values. (Points : 5) 

Question 9.9. A perpetuity is an annuity with an infinite life, providing continual annual cash flow. (Points : 5) 

Question 10.10. The formula for calculating the present value of a perpetuity is PV=CF times r. (Points : 5) 


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