A) Interest rate increases.
B) Future payment is closer to the present.
C) Risk of nonpayment increases.
D) Opportunity cost of money decreases.
F) All of the above
Correct Answer
verified
Correct Answer
verified
A) Transferring purchasing power from savers to dissavers.
B) Lending or investing the savings they hold.
C) Reducing search and information costs in the financial markets.
D) Spreading risk out over many individuals.
F) A) and C)
Correct Answer
verified
Correct Answer
verified
A) Takes into account the possibility of nonpayment.
B) Uses a lower interest rate in its calculation.
C) Uses a higher interest rate in its calculation.
D) Assumes that future payments take place over a longer period of time.
F) All of the above
Correct Answer
verified
Correct Answer
verified
A) Gain profits for investors.
B) Allocate resources to profitable businesses and away from businesses with losses.
C) Earn dividends for shareholders.
D) Provide the federal government with a source of loanable funds when it has a budget deficit.
F) B) and D)
Correct Answer
verified
Correct Answer
verified
A) Future value of a current payment.
B) Present value of a future payment.
C) Probable value of a future payment,including the risk of nonpayment.
D) Difference in the rates of return on risky and safe investments.
F) A) and B)
Correct Answer
verified
Correct Answer
verified
A) To receive interest payments on the firm's debt.
B) The anticipation of capital gains.
C) To have a direct role in the operation of the corporation.
D) To own a low-risk,illiquid asset.
F) A) and D)
Correct Answer
verified
Correct Answer
verified
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