Week 2

Question 1

What is real property and which is an example? Real property is __________.

A. Machinery
B. Garage
C. Office Furniture

Answer 1

Real property is fixed buildings/structures.

B. Garage

Question 2

A value today of an amount to every received in the future is called:

A. Future
B. Present
C. Interest
D. Debt

Answer 2

B. Present

Question 3

To find the present value of an item is a process referred to as______________.

A. Calculating
B. Discounting
C. Compounding
D. Adding

Answer 3

B. Discounting

Question 4

A capital gain is :

A. selling an asset for less that its purchase price
B. selling an asset equal to it’s purchase price
C. purchasing a new asset at a rate lower than the market rate of the asset
D. selling an asset for more than it’s purchase price

Answer 4

D. selling an asset for more than it’s purchase price

Question 5

The more frequently a bank compounds interest,_________ for a given nominal rate will be.

A. the higher the effective rate
B. the lower the yield rate
C. the higher the stated rate

Answer 5

A. the higher the effective rate