Quiz Ch 11 – Assessing Statements About IRR, NPV, and Cash Flows
Fundamentals of Financial Management, Concise
Brigham and Houston
09th Edition
Which statement is accurate concerning various aspects of IRR, NPV, and cash flows?
Which statement is accurate concerning various aspects of IRR, NPV, and cash flows?
Given project details and an identical NPV at a certain WACC, which project’s NPV is more affected by changes in the WACC?
In which cases is the formula P0 = Pt/((1 + r)^t) applicable for assets?
When does a bank face market value of equity risk due to a duration mismatch between assets and liabilities?
In what ways can utilizing certainty-equivalent cash flows be advantageous?
Under what circumstances will the realized rate of return surpass the promised yield for a bond with a 4-year duration held over a 6-year investment horizon?
How does a bond’s duration change with variations in yield to maturity, assuming all other factors remain constant?
How is the realized rate of return affected by changes in interest rates when holding a bond with a 10-year duration for an investment horizon of 6 years?
How does bond convexity impact the price change difference between yield decreases and yield increases of equal magnitude?
How does price sensitivity respond to rising interest rates with bonds above par?