Question

Question:- 1) Which one of the following statements is true about an amortized loan? A. With an amortized loan, a smaller proportion of each month’s payment goes toward interest in the early periods. B With an amortized loan, a bigger proportion of each month’s payment goes toward interest in the later periods. C. With an amortized loan, a bigger proportion of each month’s payment goes toward interest in the early periods. D With an amortized loan, the proportion of the loan that goes toward interest does not change at any point. Question:- 2) Your investment in a small business venture will produce cash flows that increase by 15 percent every year for the next 25 years. This cash flow stream is called: A. an annuity due. B. a growing perpetuity. C. an ordinary annuity. D. a growing annuity. Question 3) If your investment pays the same amount at the end of each year forever, the cash flow stream is called: A. an ordinary annuity. B. a perpetuity. C. an annuity due. D. none of the above. Question:- 4) Use the following table to calculate the expected return for the asset. Return Probability 0.10 0.30 0.20 0.50 0.25 0.25 A. 15.0% B. 17.5% C. 18.75% D. 19.25%