Financial Analysis & Decision Making - Quiz 1

Financial Analysis & Decision Making - Quiz 1

University

20 Qs

quiz-placeholder

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Financial Analysis & Decision Making - Quiz 1

Financial Analysis & Decision Making - Quiz 1

Assessment

Quiz

Other

University

Hard

Created by

Abhishek Jain

Used 4+ times

FREE Resource

20 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Time value of money indicates that

A unit of money obtained today is worth more than a unit of money obtained in future

A unit of money obtained today is worth less than a unit of money obtained in future

There is no difference in the value of money obtained today and tomorrow

None of the above

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Time value of money supports the comparison of cash flows recorded at different time period by

Discounting all cash flows to a common point of time

Compounding all cash flows to a common point of time

Using either (a) or (b)

None of the above

3.

MULTIPLE CHOICE QUESTION

45 sec • 1 pt

If the nominal rate of interest is 10% per annum and there is quarterly compounding, the effective rate of interest will be:

10% per annum

10.10 per annum

10.25%per annum

10.38% per annum

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Relationship between annual nominal rate of interest and annual effective rate of interest, if frequency of compounding is greater than one:

Effective rate > Nominal rate 

Effective rate < Nominal rate

Effective rate = Nominal rate

None of the above

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Mr. X takes a loan of Rs 50,000 from HDFC Bank. The rate of interest is 10% per annum. The first installment will be paid at the end of year 5. Determine the amount of equal annual installments if Mr. X wishes to repay the amount in five installments.

Rs 19500

Rs 19400

Rs 19310

None of the above

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Present value tables for annuity cannot be straight away applied to varied stream of cash flows.

True

False

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

To find the present value of a sum of Rs. 10,000 to be received at the end of each year for the next 5 years at 10% rate, we use:

Present value of a single cash flow table

Present value of annuity table.

Future value of a single cash flow table

Future value of annuity table

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