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1 Finance MCQs

The interest rate that a borrower pays and a lender charges is called:

  • Annual rate
  • Periodic rate
  • Perpetuity rate of return
  • Annuity rate of return
0 Comments
Correct Answer: B. Periodic rate

Explanation:

The correct option is this Periodic rate.


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2 Finance MCQs

A loan that is repaid in equal installments on a monthly, quarterly, or annual basis is called:

  • Amortized loan
  • Depreciated loan
  • Appreciated loan
  • Repaid payments
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Correct Answer: A. Amortized loan

Explanation:

The correct option is this Amortized loan.


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3 Finance MCQs

The interest rate quoted to consumers on loans, without adjusting for compounding, is called:

  • Annual percentage rate (APR)
  • Annual rate of return
  • Loan rate of return
  • Local rate of return
0 Comments
Correct Answer: A. Annual percentage rate (APR)

Explanation:

The correct option is this Annual percentage rate (APR).


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4 Finance MCQs

Financial securities that can be quickly converted into cash at or near their book value are called:

  • Inventories
  • Short-term investments
  • Cash equivalents
  • Long-term investments
0 Comments
Correct Answer: C. Cash equivalents

Explanation:

The correct option is this Cash equivalents.


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5 Finance MCQs

If a security pays $100 at the end of each year for three years, it is an example of which type of cash flow?

  • Fixed payment investment
  • Lump sum amount
  • Fixed interval investment
  • Annuity
0 Comments
Correct Answer: D. Annuity

Explanation:

The correct option is this Annuity.


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6 Finance MCQs

The calculation of net income plus amortization and depreciation, divided by the number of common shares outstanding, is called:

  • Cash flow of financing activities
  • Cash flow per share
  • Cash flow of investment
  • Cash flow of operations
0 Comments
Correct Answer: B. Cash flow per share

Explanation:

The correct option is this Cash flow per share.


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7 Finance MCQs

In time value of money calculations, how is the periodic interest rate represented on a timeline?

  • Not shown on timeline
  • Shown on timeline
  • Multiplied on timeline
  • Divided on timeline
0 Comments
Correct Answer: B. Shown on timeline

Explanation:

The correct option is this Shown on timeline.


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8 Finance MCQs

In finance, dividing a payment by the interest rate gives the formula for which of the following?

  • Future value of perpetuity
  • Present value of perpetuity
  • Due perpetuity
  • Deferred perpetuity
0 Comments
Correct Answer: B. Present value of perpetuity

Explanation:

The correct option is this Present value of perpetuity.


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9 Finance MCQs

In time value of money calculations, what does ā€œNā€ represent?

  • Number of payment periods
  • Number of investments
  • Number of installments
  • Number of premiums received
0 Comments
Correct Answer: A. Number of payment periods

Explanation:

The correct option is this Number of payment periods.


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10 Finance MCQs

In the time value of money concept, the process of determining the present value of a future sum is called:

  • Compounding
  • Discounting
  • Money value
  • Stock value
0 Comments
Correct Answer: B. Discounting

Explanation:

The correct option is this Discounting.


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