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4 Written questions

4 Multiple choice questions

  1. risk that affects all companies in the stock market
  2. the accumulation of a sum of money in, say, a bank account, where the interest earned remains in the account to earn additional interest in the future
  3. a dislike of uncertainty
  4. the amount of money in the future that an amount of money today will yield, given prevailing interest rates x/(1-r)^n

4 True/False questions

  1. present valuethe amount of money today that would be needed using prevailing interesting rates to produce a given future amount of money (1+r)^n = 100


  2. diversificationa dislike of uncertainty


  3. firm-specific riskrisk that affects all companies in the stock market


  4. financethe field that studies how people make decisions regarding the allocation of resources over time and the handling of risk


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