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If the amount invested (present value) is doubled, then the future value will be_________doubled

exactly

If the interest rate is doubled for a one-period investment, then the total amount of interest earned will be ___________doubled.

exactly

If the interest rate is doubled for a multi-period investment, then the total amount of interest earned will be_______ _______ doubled.

more than

the future value is ______ related to time.

directly

the future value is ______ related to the interest rate.

directly

The present value of a lump sum is _______ related to time.

inversely

the present value is _______ related to the discount rate.

inversely

The present value interest factor is ______ related to the future value interest factor.

inversely

The present value of an annuity due is _____ ______ the future value of the same ordinary annuity.

greater than

The future value of an annuity due is _____ _____ the future value of the same ordinary annuity.

greater than

A fully amortizing loan will have a ________ payment amount. The amount of the principal reduction included i each payment will ________ as the amount of interest charged ___________ because the loan balance declines.

constant, increase, decrease

Compounding causes the amount of interest earned each period on an investment to _______.

increase

The present value of a two-period annuity due is ____ _____ the present value of the same annuity if it were an ordinary annuity.

more than

If a loan amount is doubled, then the payment amount will be ______ doubled.

exactly

To accumulate a certain future value of an annuity, if an annual ordinary annuity payment is made on a monthly basis instead of annually, the monthly payment will be ____ _____ one twelfth of the annual payment.

less than

The total interest paid over the life of a 30-year loan will be ____ ____ double the total interest paid over the life of an otherwise identical 15-year loan.

more than

For a given APR, the APY is _____ related to the number of compounding periods within the year.

directly

A bond's price is ______ inversely related to the changes i the investor's required rate of return.

inversely

the market value of a bond will be _____than the par value (it will sell at a _______) if the investor's required rate of return is above the coupon rate.

less, discount

____-term bonds have greater interest rate risk than do _____-term bonds.

long, shorter

the price of a bond and its YTM are _____ related.

inversely

The_____ the maturity of a bond, the greater its interest sensitivity.

longer

Interest rate risk and reinvestment risk are_____.

competitive

Premium bonds have a YTM that is _____than the coupon rate.

<

The higher the required rate of return, the ____ the bond's price.

lower

The higher the investor's tax bracket, the _______ the pre-tax equivalent yield for a given muni yield.

higher

the yield curve is a graph of __ __ __ versus ______. Longer maturities typically correspond to ____ rates (the term structure is ______ sloping)

rates of return, maturity, higher, upward

About this deck

Author: John L.

Textbook: Fundamentals of Corporate Finance Standard Edition

Created: 2013-09-22

Updated: 2013-09-23

Size: 27 flashcards

Keywords: flash card flashcards digital flashcards note sharing notes textbook wiki college dorm class classroom exam homework test quiz university college education learn student teachers tutors share, study blue studyblue studyblu

Views: 17

Textbook: Fundamentals of Corporate Finance Standard Edition

Created: 2013-09-22

Updated: 2013-09-23

Size: 27 flashcards

Keywords: flash card flashcards digital flashcards note sharing notes textbook wiki college dorm class classroom exam homework test quiz university college education learn student teachers tutors share, study blue studyblue studyblu

Views: 17

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