MONEY & BANKING Management (MGT411)
QUIZ # 01
MARKS: 10
Time: 15mintues
1- A lender is promised a $100 payment (including interest) one year from today. If the lender has an 8% opportunity cost of money, he should be willing to accept what amount today?
A.$100.00
B.$108.20
C.$92.59
D.$96.40
2- The higher the Future Value (FV) of the payment, the higher will be the:
A.Discount rate
B.Present value
C.Liquidity
D.Cost of borrowing
3- The procedure of finding out the Present Value (PV) is known as:
A.Discounting
B.Compounding
C.Time value of money
D.Bond pricing
4 —————- tells us after how much time period the amount of money will become double.
A.Real interest rate
B.Nominal interest rate
C.Rule of 72
D.Time value of money
5- The interest rate used in the present value calculation is often referred to as:
A.Discount rate
B.Inflation rate
C.Nominal rate
D.None of the given option
6- The procedure of finding out the Future Value (FV) is known as:
A.Discounting
B.Compounding
C.Time value of money
D.Bond pricing
7- The price of a bond is the —————- of its payments.
A.Present Value
B.Future Value
C.Coupon rate
D.Principal amount
8- The —————is defined as the probability weighted average of the squared deviations of the possible outcomes from their expected value.
A.Standard deviation
B.Variance
C.Mean
D.Median
9- The difference between real and nominal interest rate is
A.The cost of borrowing
B.The effect of inflation
C.The price of bonds
D.None of the given option
10- The Future Value (FV) of $1000 in 5 years at 5% interest rate will be:
A.$1000.00
B.$1276.28
C.$999.99
D.$1500.52
