IEECONO (Quiz 1)

Question 1

Refers to wealth in the form of money or property that can be used to produce more wealth

Answer 1

Capital

Question 2

Cost of money often expressed as a percentage that is periodically applied and added to amount (or varying amounts) of money over a specified length of time.

Answer 2

Interest

Question 3

When total interest earned or charged is linearly proportional to the initial amount of the loan (principal, or the amount of money borrowed)

Answer 3

Simple Interest

Question 4

Series of equal payments occurring at equal periods of time.

Answer 4

Annuities

Question 5

An annuity which payments continue indefinitely

Answer 5

Perpetuities

Question 6

Involves receipts and expenses that are projected to increase or decrease by a uniform amount each period, thus constituting an arithmetic sequence of cash flows.

Answer 6

Linear Gradient Series

Question 7

Type of annuity wherein the cash flow does not begin until some later date; one where the first payment is made several periods after the beginning of the annuity.

Answer 7

Deferred Annuity

Question 8

Type of annuity wherein the first cash flow is made at the end of the first period

Answer 8

Ordinary Annuity

Question 9

A certificate of indebtedness, interest of which is to be paid periodically while the principal (par value) is to be paid at the end of the loan period (maturity date).

Answer 9

Bonds