le PRAIRIE VIEW A+M HELP ENGLISH-UNITED STATES (EN-US) . eCourses 21 As discount
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le PRAIRIE VIEW A+M HELP ENGLISH-UNITED STATES (EN-US) . eCourses 21 As discount rate increases, the present value of a given sum of money to be recelved at a future date t yet swered Select one: O a increases O b decreases O c. stays the same-no change ints out of 1 uestion 22 Not yet Which of the following terms best describes an annuny due? Select one Oa. a perpetuty O b unequal payments O c. equal payment at beginning of year O d equal payment at the end of the year Points out of 1 queston Queston 23 Not yet A common stock gives its shareholders the right to have dividend trom the stock. Sclect one O True O False Ponts out of 1 Flag question Quesson 24 Preferred stock guarantees fixed dvidend to its owners enswered Select one O True O False Points out of 1 queston Guestion 25 interest rate risk in bond investment arises due to fact that Select one Pots out of t O a bond's coupon rate may change overtimeExplanation / Answer
1 (b) As discount rate increases,the present value of a given sum of money to be received at a future date decreases. For Example Investment of 5000 after 1 year at 10% discount rate and 9% discount rate P.V P.V Factor 10% ,for 1 year 0.909 4545 P.V Factor 9% ,for 1 year 0.917 4585 As discount rate increases,the present value of a given sum is decreases. 2 c) Equal payment at begnning of year is best describe as annuity due For example rent generally paid at the beginning of month 3 (True) A common stock gives the shareholders the rights to have dividend from the stock. Common stock holders have various rights out of which one right is entitlement to dividend. 4(True) Preferred stock guarantee fixed divdend to its owners. Preferred stock holders entitled dividend before common stock holder and guarantee fixed dividend.
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