This term describes earning interest on previously earned interest.
Compounding
100
A Coupon Rate of 7% pays how much in interest each year?
$70
100
You can make money in two ways from stock - dividend yield and____.
Capital Gains
100
Which is greater. The Present Value of a Lump Sum or the Future Value of a Lump Sum?
Future value of a Lump Sum.
200
A series of payments in equal amounts for a specified number of periods.
Annuity
200
As bonds near their maturity date, their prices will get closer to ___?
$1,000
200
Name of your first pet?
Niplah
200
True or False - A dollar in hand today is worth more than a dollar in hand one year from today?
True
300
The term for an annuity that has payments coming (or going) at the END of each period.
'Ordinary' Annuity
300
If a bond's coupon payment is $100, what is its Coupon Rate?
10%
300
If you purchase a stock at time Period '3', which dividend is the first one you are entitled to?
D4 (D sub 4)
300
Time '0' represents what point in time?
Today.
400
The amount to which a cash flow will grow over a given period of time, compounded at a given interest rate.
Future Value
400
If interest rates go up in the market after a bond is issued, what will likely happen to the price of that bond?
It will go down.
400
If the most recent dividend was $1 and g = 5%, what is D2 (D sub 2).
$1.1025
400
Does the FV of a lump sum go up faster at an interest rate of 7% or 9%?
9%
500
A stream of equal payments lasting forever?
Perpetuity
500
You just purchased a bond that is due in 10 years, has a $1,000 par value, an $80 Coupon Payment, and you want to make 10% on this investment. How much did you pay?
$877.11
500
Using the CAPM equation and given the following data, what is the Required Rate of Return for this stock?
r = ?
b = .9
Risk-Free Rate = 6%
Average Stock Return in the Market = 10%
9.6%
500
Using the Rule of '72', if you want your money to double in 10 years, what rate must you earn on your money (roughly)?