F2. 1) A bank's one-year certificate of deposit will pay a specific fixed amount at the year-end. This means that the certificate will sell at a lower price if the interest is compounded semi-annually rather than annually.   a) True   b) False

Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 12MC: (1) What is the value at the end of Year 3 of the following cash flow stream if the quoted interest...
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F2.

1) A bank's one-year certificate of deposit will pay a specific fixed amount at the year-end. This means that the certificate will sell at a lower price if the interest is compounded semi-annually rather than annually.

 

a) True

 

b) False

 

2) A project with zero NPV will not recover the opportunity cost of capital invested in it.

 

a) True

 

b) False

 

3)A $40,000 consumer loan is to be paid off with monthly payments of $1,150.72. What monthly interest rate is to be paid?

 

a) 1.0%

 

b) 1.5%

 

c) 2.0%

 

d) 2.2%

 

e) None of the above

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