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Lớp Stt Tên

Lt2 01 Lương Hải Đăng
Lt2 02 Trịnh Đức Điệp
Lt2 03 Nguyễn Minh Đức
Lt1 07 Nguyễn Quốc Dũng
Lt1 06 Phạm Tuấn Cường
Lt1 24 Bùi Việt Anh

Multiple choice questions Chapter 2

Q1 :If the interest rate on a loan is 12% per year with compounding
monthly, the effective annual rate of interest is
A. 12%
B. 12,36%
C. 12,68%
D. 12.84%
Q2:If a loan of ABC $30000 is to be paid in 5 annual installments with
interest rate of 12% p.a then the equal annual installment will be
A. $7400
B. $8100
C. $7812
D. $8322
Q3:If the effective rate of interest compounded quarterly is 10% ,then the
nominal rate of interest is
A. 9,64%
B. 8,38%
C. 9,46%
D. 10,38%
Q4: Firm X borrows 1000 VND million from BIDV to buy a new
equipment. The firm agrees to repayment schedule of 5-equal-annual
payments starting one year from today at the interest rate of 10%,
compounded annually. What is the payment in the future in outlining the
loan amortization schedule?
 −6
1−( 1+10 % )
A. 1000 /
10 %
−5
1−( 1+10 % )
B. 1000 /
10 %
−4
1−( 1+10 % )
C. 1000 /
10 %
5
1−( 1+10 % )
D. 1000 /
10 %

Q5: Ms. Dang wants to buy a flat. The flat cost VND 3000 million in total
and she is now having insufficient money. But she has determined that she
can afford a VND 500 million annual payment for the next 10 years and can
borrow the money at 10% per year to afford the flat. After calculating, she
knows that the present value of VND 500 million annual payment for the
next 10 years with interest rate 10% per year is VND 3072.28 million. What
does that means?
A. She can borrow the money and pay off in the time of 10 years
B. She cannot borrow the money and pay off in the time of 10 years
C. She can can borrow the money but pay off in the time of more than 10
years
D. She can borrow the money and pay off in the time of only 9 years

Q6: The difference between effetive annual rate of interest with quarterly
compounding ,when nominal rate of interest rate is 10%
A. 0,1%
B. 0,14%
C. 0,21%
D. 0,09%
E. 0,38%
Q7: Which of these is an annuity?
A. Bob gets $10 this year and $20 next
B. Jack gets $10 in three months and $10 six months later
C. Betty gets $50 in six months and $20 six months later
D. Joan gets $100 every year for the rest of her life

Q8: If the nominal rate of return is 10% p.a and effective rate of interest is
10,45% p.a ,determine the frequency of compounding :
 A. 3
B. 7
C. 5
D. None of the above

Q9: Anakin deposits $100,000 in a bank with the period of 5 years. How
much money will he receive if the interest rate was 10% p.a? (Unit: Dollar)
A. 116,051
B. 161,051
C. 151,061
D. 115,061

Q10: On 1 Jan 20X0, Mr Ricon has $7,000. He calculates that if he deposits

this amount of money in the bank with the interest rate of 10% p.a, he will
have enough amount of money to buy himself a World Cup title which is
$50,000 after 10 years. Is Mr Ricon calculation reasonable?
A. Yes, it is
B. No, it isn’t
Q11: What factors would affect the time value of money?
A. Inflation
B. Interest rate
C. Both A&B
D. None of the above

Q12: Suppose Mario finds out an investment pays 20% per year. He invests
$30,000 now, how much will Mario receive at the end of the year three?
A. 51,840
B. 58,410
C. 78,104
D. 75,640

Q13: A cash flow stream is defined as a collection of the sequent amount of

money in several periods or a series of cash flows occur …?
A. At the end of each year
B. In several periods
C. At the end of each month
D. In a single period

Q14: Which one of these sentences is true about the time value of money ?
 A. It means a specific amount of money we have today is more valuable
than the same amount we receive at sometime in the past
B. It means a specific amount of money we have today is more
valuable than the same amount we receive at sometime in the future
C. It means a specific amount of money we have today is more
valuable than the same amount we receive at sometime at the present
D. Non of these sentences are true
Q15: The process of calculating future value of money from the present
value is classified as ?
A. Compounding
B. Discounting
C. Money value
D. Stock value
Q16: The discounted cash flow analysis is also classified as?
A. Time value of stock
B. Time value of money
C. Time value of bonds
D. Time value of treasury bonds
Q17: An interest rate is 5%, the number of period are 3, and the present
value is $100, then the future value is calculated by compouding method
will be ?
A. 115,76
B. 105
C. 110,25
D. 113,56
Q18: The difference in the future value of VND 300 million today at the
rate of 15% after 11 years when using the compound and simple interest
calculation is:
A. VND 130 million
B. VND 601,71 million
C. VND 600,717 million
D. VND 500,71 million
Q19: If you want to know how much of money you have to invest today to
receive a particular amount of money after 5 years, you have to use:
A. The future value of a single cash flow.
B. The future value of annuity.
C. The future value of perpetuity.
 D. The present value of a single cash flow.
Q20: What is the formula of the present value of a single cash flow?
A. FV = PV(1+r)-n
B. PV =
C. PV =
D. All are correct.
Q21: If Mr Nam want to have 1.210 million VND after two years with
interest rate 10%. How much money does he have to invest to day?
A. 1.000 million VND
B. 900 million VND
C. 1.100 million VND
D. 800 million VND
Q22: Which is the sum of present value of each amount of money?
A. The present value of a single cash flow
B. The prevent value of a cash flow stream
C. The prevent value of annuity
D. The present value of perpetuity
Q23: What is a set of identical payments occuring each period in an infinite
time?
A. Perpetuity
B. Growing perpetuity
C. The ordinary annuity
D. The annuity due
Q24: If you have a perpetuity with an annual payment VND 500 million at
the end of each year and 8% of annual interest rate? What is the present
value of perpetuity?
A. 5789 million
B. 6250 million
C. 6456 million
D. 5958 million
Q25: If you receive an offer from a bank about the collection of the future
cash flow. You will get VND 20 million in one year, the endless payment will
continuously increase by 8%. The interest rate is 13%. How much money
are you willing to pay the bank today to get this offer?
A. 650 million
B. 400 million
 C. 300 million
D. 350 million

Q26: You won a local lottery with two offers. The first option is to get VND
200 million immediately. The other option is the lottery company will pay
her VND 18 million at the end of each year in 25 years. Which offer should
she choose today if the interest of the Treasury Bond is at 8%?
A. Get 200 million VND immediately.
B. Get 18 million at the end of each year in 25 years.

Q27: Your friend asks you for your investment into his cafeteria. He
promises to pay you VND 15 million in year 1, and the growth rate at 7%.
The first payment occurs at the end of year 1. The payments last 18 years.
The interest rate is 14%. What is the present value of this planned
investment?
A. 110.15 million VND
B. 122.82 milliom VND
C. 136.72 million VND
D. 145.80 million VND