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CA Foundation Time Value of Money — practice questions — page 3

Explore 93 free Time Value of Money questions in CA Foundation Quantitative Aptitude. Open each question or exercise to read its content, reference answers and available explanation.

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Time Value of Money questions and exercises with answers

Showing questions 61–90 of 93.

Annuities are commonly issued by which type of institution?Read the answer and worked solution →Johan de Witt's 1671 report for the Dutch government valued which instrument?Read the answer and worked solution →In a tontine, payments to surviving participants could?Read the answer and worked solution →Which contract uses a fixed interest rate declared by the insurer?Read the answer and worked solution →Equity-indexed annuities credit interest based partly on a specified?Read the answer and worked solution →Which arrangement may use an annuity to pay personal-injury compensation in instalments?Read the answer and worked solution →Under the prospective method, the outstanding loan balance is the PV of?Read the answer and worked solution →A loan repaid by level payments at each period end forms which annuity?Read the answer and worked solution →A project with a positive NPV is expected to produce a?Read the answer and worked solution →A benefit of NPV is that the NPVs of different projects are?Read the answer and worked solution →NPV accuracy relies heavily on the choice of which input?Read the answer and worked solution →Being purely financial, an NPV calculation does not consider?Read the answer and worked solution →A project with a negative NPV has an IRR that is?Read the answer and worked solution →NPV is complemented by IRR to show gain in which form?Read the answer and worked solution →Net present value is also known as?Read the answer and worked solution →The NPV approach is consistent with which corporate goal?Read the answer and worked solution →A sinking fund sets aside revenue over time to fund what?Read the answer and worked solution →Who published a 1772 pamphlet on reducing the British national debt?Read the answer and worked solution →Lord Liverpool's government abandoned Britain's sinking fund in which decade?Read the answer and worked solution →A sinking fund helps an organization avoid what at the debt's maturity?Read the answer and worked solution →A sinking fund for capital expenditure may be used for what purpose?Read the answer and worked solution →In personal finance, sinking funds suit zero-based or cash ___ budgeting.Read the answer and worked solution →An EMI is a fixed payment made by a borrower at what interval?Read the answer and worked solution →Each EMI payment is made up of which components?Read the answer and worked solution →Unlike an EMI loan, a variable payment plan lets the borrower?Read the answer and worked solution →In the EMI formula, a 12% annual rate is used monthly as?Read the answer and worked solution →In Indian banking usage, EMI stands for?Read the answer and worked solution →A loan whose every payment covers interest and principal is called?Read the answer and worked solution →CAGR represents the mean ___ growth rate of compounding values.Read the answer and worked solution →CAGR smooths the effect of what in periodic values?Read the answer and worked solution →

Worked practice questions

Annuities are commonly issued by which type of institution?

  1. Commodity boards
  2. Stock exchanges
  3. Central banks
  4. Insurance companies
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Correct answer: D. Insurance companies

Individuals pay insurers a lump sum or premiums in return for regular income payments.

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Johan de Witt's 1671 report for the Dutch government valued which instrument?

  1. Ship cargoes
  2. Land taxes
  3. Life annuities
  4. Tulip bonds
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Correct answer: C. Life annuities

De Witt used discounted expected-value reasoning to price life annuities.

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In a tontine, payments to surviving participants could?

  1. Stay unchanged
  2. Fall every year
  3. Increase over time
  4. Stop after a year
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Correct answer: C. Increase over time

The shares of participants who died were redistributed to survivors, raising their payments.

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