Chapter7/8

Question 1

Future Value of a Dollar

Answer 1

Amount to which a single payment will grow at some rate of interest

Question 2

Present Value

Answer 2

Current value of a dollar to be received in the future

Question 3

Annuity

Answer 3

Series of equal, annual payments

Question 4

Future value of an annuity

Answer 4

Amount to which a series of equal payments will grow at some rate of interest

Question 5

Annuity Due

Answer 5

Annuity in which the payments are made at the beginning of the time period

Question 6

Ordinary annuity

Answer 6

Annuity in which the payments are made at the end of a time period

Question 7

Return

Answer 7

What is earned on an investment, the sum of income and capital gains generated by an investment

Question 8

Required Return

Answer 8

Return necessary to induce an individual to make an investment

Question 9

Risk

Answer 9

Possibility of loss, the uncertainty that the anticipated return will not be achieved

Question 10

Time Series Analysis

Answer 10

Analysis of a firm over a period of time

Question 11

Cross-Sectional Analysis

Answer 11

Analysis of several firms in the same industry at a point in time