Financial Management - Study Mode
[#166] Type of interest rates consist of
Correct Answer
(D) all of above
Explanation
Solution: Type of interest rates consist of nominal rates, periodic rates and effective annual rates.
[#167] An interest rate which is paid by money borrower and charged by lender is considered as
Correct Answer
(B) periodic rate
Explanation
Solution: An interest rate which is paid by money borrower and charged by lender is considered as periodic rate. A periodic interest rate can be charged on a loan or realized on an investment over a specific period of time.
[#168] In calculation of time value of money, 'PMT' represents
Correct Answer
(B) payment
Explanation
Solution: In calculation of time value of money, 'PMT' represents payment.
[#169] Markets in which corporations raise capital for creating market transaction which are classified as
Correct Answer
(C) primary markets
Explanation
Solution: Markets in which corporations raise capital for creating market transaction which are classified as primary markets. The primary market is where securities are created. It's in this market that firms sell (float) new stocks and bonds to the public for the first time. An initial public offering, or IPO, is an example of a primary market.
[#170] Notes, mortgages, bonds, stocks, treasury bills and consumer loans are classified as
Correct Answer
(A) financial instruments
Explanation
Solution: Notes, mortgages, bonds, stocks, treasury bills and consumer loans are classified as financial instruments. Financial instruments are assets that can be traded, or they can also be seen as packages of capital that may be traded. Most types of financial instruments provide efficient flow and transfer of capital all throughout the world's investors.