JOIN ADRE 2.0 Telegram Group

Time Value of Money Multiple Choice Questions and Answers | Time Value of Money MCQs Quiz

Questions
1 Time value of money indicates that
A A unit of money obtained today is worth more than a unit of money obtained in future
B A unit of money obtained today is worth less than a unit of money obtained in future
C There is no difference in the value of money obtained today and tomorrow
D None of the above

Answer:A unit of money obtained today is worth more than a unit of money obtained in future
2 Time value of money supports the comparison of cash flows recorded at different time period by
A Discounting all cash flows to a common point of time
B Compounding all cash flows to a common point of time
C Using either a or b
D None of the above.

Answer:Using either a or b
Advertisement
Article and Schedule Quiz Start Test!

DOWNLOAD CURRENT AFFAIRS PDF FROM APP

3 If the nominal rate of interest is 10% per annum and there is quarterly compounding, the effective rate of interest will be:
A 10% per annum
B 10.10 per annum
C 10.25%per annum
D 10.38% per annum

Answer:10.38% per annum
4 Relationship between annual nominal rate of interest and annual effective rate of interest, if frequency of compounding is greater than one:
A Effective rate > Nominal rate
B Effective rate < Nominal rate
C Effective rate = Nominal rate
D None of the above

Answer:Effective rate > Nominal rate
5 Mr. X takes a loan of Rs 50,000 from HDFC Bank. The rate of interest is 10% per annum. The first installment will be paid at the end of year 5. Determine the amount of equal annual installments if Mr. X wishes to repay the amount in five installments.
A Rs 19500
B Rs 19400
C Rs 19310
D None of the above

Answer:Rs 19310
6 If nominal rate of return is 10% per annum and annual effective rate of interest is 10.25% per annum, determine the frequency of compounding:
A 1
B 2
C 3
D None of the above

Answer:2
7 Present value tables for annuity cannot be straight away applied to varied stream of cash flows.
A True
B False

Answer: True
8 Heterogeneous cash flows can be made comparable by
A Discounting technique
B Compounding technique
C Either a or b
D None of the above

Answer:Either a or b
9 Interest paid (earned) on only the original principal borrowed (lent) is often referred to as?
A Compound interest
B Future value
C Present value
D Simple interest

Answer: Simple interest
10 Treasury bills are?
A Issued on a premium basis and pay a fixed annual interest rate
B Issued on a discount basis and mature at par
C Issued on a premium basis and mature at par
D Issued on a discount basis and pay a fixed annual interest rate

Answer:Issued on a discount basis and mature at par

ADRE 2.0 FULL LENGTH MOCK TEST

Take Mock Tests

Missiles Mock Test Start Test!
SSC MTS Mock Test Start Test
IBPS CLERK MOCK TEST Start Test
SSC MTS 2022 JULY 26 Shift 1 (ENGLISH) Start Test!
SSC GD Previous Year Paper 2021 Nov 17 Shift - I (Hindi) Start Test!
SSC CGL Tier - 1 PYP 2022 April 21 Shift- 1 (ENGLISH) Start Test!
MPSC PAPER I MOCK TEST 1 (ENGLISH) Start Test!
IB Security Assistant Mock test 1 (english) Start Test!
UP POLICE CONSTABLE MOCK TEST 1 Start Test!
DELHI POLICE CONSTABLE MOCK TEST 1 (HINDI) Start Test!
Advertisement