Q2: ALL

Question 1

When the interest due at the end of a certain period is added to the principal and that sum earns
interest for the next period, the interest paid is called

Answer 1

compound interest

Question 2

sequence of payments made at equal or fixed intervals or periods of time

Answer 2

annuity

Question 3

the time between successive payments

Answer 3

payment interval

Question 4

an annuity where the payment interval is the same as interest period

Answer 4

simple annuity

Question 5

an annuity where the payment interval is not the same as the interest period

Answer 5

general annuity

Question 6

a type of annuity in which the payments are made at the end of each payment interval

Answer 6

ordinary annuity or annuity immediate

Question 7

a type of annuity in which the payments are made at beginning of each payment interval

Answer 7

annuity due

Question 8

an annuity in which payments begin and end at definite times

Answer 8

annuity certain

Question 9

an annuity in which the payemnts extend over an indefinite length of time

Answer 9

contingent annuity

Question 10

time between the first payment interval and last payment interval

Answer 10

term of an annuity

Question 11

the amount of each payment

Answer 11

regular or periodic payment

Question 12

sum of future value of all the payments to be made during the entire term of the annuity

Answer 12

future value of an annuity or amount of an annuity

Question 13

sum of present values of all the payments to be made during the entire term of the annuity

Answer 13

present value of an annuity

Question 14

is an annuity in which the first payment is not made at the beginning nor at the end of the payment interval, but at a later date.

Answer 14

deferred annuity

Question 15

The length of time when these payments are made is called the ______

Answer 15

period of deferment/ period of deferral.

Question 16

is a debt contract entered into by two parties, an organization or an individual, through a note which states the principal amount, interest rate, the mode of payment including the date of payment.

Answer 16

Financial Loan

Question 17

is a loan given to customers for personal, family, or consumable items such as a car and home.

Answer 17

consumer loan

Question 18

is debt that the company is required to pay according to the loan’s terms and conditions.

Answer 18

business loan

Question 19

It is an asset presented by a borrower that is pledged to be given to the lender in case the borrower defaulted on the loan or failed to pay back the loan.

Answer 19

collateral

Question 20

An individual who agrees to pay back a loan if the borrower fails to pay the loan on time.

Answer 20

guarantor

Question 21

is a paper issued to a shareholder which shows on its face the number of shares it represents.

Answer 21

stock certificate

Question 22

type of stock for which stockholders get first choice in distributed profits. Owners are guaranteed a fixed dividend for as long as they own stock.

Answer 22

preferred stock

Question 23

the ordinary stock of a corporation, paying no specified rate or amount of dividend. Owners usually comprise more than half of the totality of the company’s stocks.

Answer 23

common stock

Question 24

earnings distributed to shareholders of a corporation

Answer 24

dividend

Question 25

amount of interest

Answer 25

dividend

Question 26

the face value of a bond or stock

Answer 26

par value

Question 27

The basis for calculating the interest to be paid.

Answer 27

par value

Question 28

the price at which a stock or bond is sold.

Answer 28

market price

Question 29

is the market place for stocks

Answer 29

exchange

Question 30

is the weighted average value of a group of a specific investment tool. It is used to describing the stock market.

Answer 30

market index

Question 31

is a measure used by investors and finance specialist to describe the stock market.

Answer 31

stock market index

Question 32

stock sold before it is available on a stock exchange.

Answer 32

initial public offering

Question 33

is a form of long-term promissory note issued by a corporation or government in exchange for a sum of money.

Answer 33

bonds

Question 34

the interest rate the bond issuer will use in computing the interest payment, usually expressed in percentage.

Answer 34

dividend rate

Question 35

Also called, the Yield.

Answer 35

dividend rate

Question 36

are interval dates, usually annual or semi-annual, on which the bond issuer will make interest payments.

Answer 36

coupon dates

Question 37

is the date then bond will mature.

Answer 37

maturity date

Question 38

is the amount which will be paid to the bondholder

Answer 38

maturity value

Question 39

If the market value is greater than the par value, then the bond is selling at a

Answer 39

premium

Question 40

If the market value is less than the par value, then the bond is selling at a

Answer 40

discount

Question 41

is the risk caused by changes in market prices of equities or bonds.

Answer 41

price risk

Question 42

is the risk due to a borrower’s failure to pay the principal and/or interest on due date.

Answer 42

credit risk

Question 43

is the risk due to inability to sell or convert assts into cash on time, or in event where conversion into cash is possible but a losing end.

Answer 43

liquidity risk

Question 44

is the risk due to political, economic, or social events or structures in the country.

Answer 44

country risk