Quiz Ch 05 – T/F Early Investment and Compound Interest
Fundamentals of Financial Management, Concise
Brigham and Houston
09th Edition
True or false: Commencing retirement investments early amplifies the advantages of compound interest.
True or false: Commencing retirement investments early amplifies the advantages of compound interest.
True or false: Initiating retirement investments early diminishes the benefits of compound interest.
True or false: With quarterly compounding of savings accounts, the effective annual rate will be greater than the nominal rate.
True or false: Holding other factors constant, the present value of a future sum diminishes when either the discount rate or the number of periods per year increases.
True or false: When keeping other factors steady, the present value of a future sum rises when either the discount rate or the number of periods per year increases.
True or false: With a positive interest rate, the future value of an expected series of payments will always be higher than the present value of the same series.
True or false: A time line remains meaningful even when not all cash flows transpire annually.
True or false: When a bank compounds savings accounts quarterly, the nominal rate will surpass the effective annual rate.
True or false: Holding other factors constant, the present value of a given annual annuity rises with an increase in the number of periods per year.
True or false: Assuming other factors remain constant, the present value of a specific annual annuity diminishes with an increase in the number of periods per year.