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A: “Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…
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- Create simple examples to illustrate the following concepts.i. Time value of moneyii. Effective interestiii. Sinking Fundiv. Amortized loanWhich of the following is the function of the financial market ? Select one : a . It decides the interest rate b . It makes loan available c . It channels funds from lenders - savers to borrowers - spenders D. None of theseThe purpose of the inflation premium is to maintain the purchasing power of money while it is loaned to someone else. TTrueFFalse What kind of problem bad credit risks people pose to financial intermediaries ? AMoral hazard BNone of the above CAdverse Selection DFree-riding
- q19 Which of the following statement is true for compensation of risk? a. Higher the risk, zero is the return b. Higher the risk, lower is the return c. Lower the risk, higher is the return d. Higher the risk, higher is the return q20 Which of the following is used generally for raising cash for settling the creditors? a. Short Term Loan b. All the options are wrong c. Line of Credit d. Long -Term LoanExplainthreereasonsthataccountforthedificultyofentrepreneurstoobtain financeQuestion #2. If we know the projected cash flows from loan notes and their current market value, what approach would we take to deducing the cost of the loan notes?
- Life inHow would youdetermine the amount topurchase? Should it be based onyour current financial situation orwhere you see yourself in thefuture?Which of the following statements correctly describes aspects of simple interest as discussed in lectures? Group of answer choices A) With simple interest, the future value of any cash flow is simply its current value discounted back at a rate of r% per period for n periods. B) None of the other statements are correct C) A loan that has been created that pays simple interest, will involve interest payments that are calculated on the basis of both the principal amount borrowed as well as any interest that has accumulated to date. D) By convention, simple interest is the main method used for the pricing of long-term bonds. E) More than one of the other statements are correctWhich of the following assets would be considered least liquid? Group of answer choices A savings account A checking account An interest-paying checking account A money market mutual fund Series EE US savings bonds
- Based on your understanding of the fAactors that affect the cost of money, Identify which of the following statement is true. a. higher inflation leads to lower interest rates. b. Interest is the price paid to borrow funds. c. Higher risk leads to lower interest rates.Which figure of merit provides an interest rate at which the present value of the future cash flows equals the amount invested? a) NPV b) IRR c) Cap Rate d) DCF Please ensure accuracy and explain your choiceWhich of the following is not a primary function of Money? a. All the options are correct b. Alternative source of repayment c. Measure of value d. Medium of exchange