1) Calculating the present and future values of multiple cash flows is relevant only for individual investors. Answer True or False 2) When you pay the same amount every month as your insurance...

1) Calculating the present and future values of multiple cash flows is relevant only for individual investors. Answer

True or False

2)

1. 
   When you pay the same amount every month as your insurance premium for a term life policy for a period of five years, the stream of cash flows is called a perpetuity. Answer
   

   
   True
   

   
   

   
   False
   

   
   

3)

1. 
   In today%u2019s financial markets, the best example of a perpetuity is the common stock issued by firms. Answer
   

   
   True
   

   
   False
   

4)

1. 
   Your investment in a small business venture will produce cash flows that increase by 15 percent every year for the next 25 years. This cash flow stream is called Answer
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   

   		an annuity due.
   		a growing perpetuity.
   		an ordinary annuity.
   		a growing annuity.

   
   

9)

1. 
   Computing annuity payment:
   Trevor Smith wants to have a million dollars at retirement, which is 15 years away. He already has $200,000 in an IRA earning 8 percent annually. How much does he need to save each year, beginning at the end of this year to reach his target? Assume he could earn 8 percent on any investment he makes. (Round to the nearest dollar.) Answer
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   

   		$13,464
   		$14,273
   		$10,900
   		$16,110

   
   

10)

1. 
   Which
   ONE
   of the following statements is true about amortization? Answer
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   

   		Amortization refers to the way the borrowed amount (principal) is paid down over the life of the loan.
   		With an amortized loan, each loan payment contains some payment of principal and an interest payment.
   		A loan amortization schedule is just a table that shows the loan balance at the beginning and end of each period, the payment made during that period, and how much of that payment represents interest and how much represents repayment of principal.
   		All of the above are true.