If the exchange rate in terms of units of currency N per unit of currency M decreases, which currency strengthened? Explain.
> Think of a 20-year annuity paying $2000 per month. If prevailing market rates decline over the next year, will the price to purchase a 20-year annuity increase or decrease? Explain.
> Calculate the missing values for the promissory notes described. Issue date = ? Term = 180 days Legal due date = Sept 2
> Suppose the discount rate used to calculate the present value of an annuity is increased (leaving n and PMT unchanged). Will the annuity’s present value be (pick one): (i) larger or (ii) smaller than before? Give a reason for your choice.
> If an ordinary annuity with quarterly payments and a 5 1 2 -year term began June 1, 2020, what are the dates of the first and last payments?
> Calculate the missing values for the promissory notes described. Issue date = ? Term = 9 months Legal due date = Oct 3
> If you pay automobile insurance premiums by monthly pre-authorized chequing, do the payments form an ordinary annuity?
> What is meant by the “term” of an annuity?
> What distinguishes an ordinary simple annuity from an ordinary general annuity?
> Solve the equations. 2 1 − b 1.45 = 5.5 b − 9
> A semiannually compounded nominal rate and a monthly compounded nominal rate have the same effective rate. Which has the larger nominal rate? Explain.
> Is the effective rate of interest ever equal to the nominal interest rate? Explain.
> Is the effective rate of interest ever numerically smaller than the nominal interest rate? Explain.
> What is meant by the effective rate of interest?
> Which investment scenario requires more time: “$1 growing to $2” or “$3 growing to $5”? Both investments earn the same rate of return. Justify your choice.
> Under what circumstance does the value calculated for n equal the number of years in the term of the loan or investment?
> Which scenario had the higher periodic rate of return: “$1 grew to $2” or “$3 grew to $5”? Both investments were for the same length of time at the same compounding frequency. Justify your choice.
> Is FV negative if you lose money on an investment?
> If FV is less than PV, what can you predict about the value for i?
> Why is $100 received today worth more than $100 received at a future date?
> Solve the equations. 10 a 2.2 + ( 2.2 ) 2 = 6 + a ( 2.2 ) 3
> Suppose it took x years for an investment to grow from $100 to $200 at a fixed compound rate of return. How many more years will it take to earn an additional 1. $100? 2. $200? 3. $300? In each case, pick an answer from: (i) more than x years, (ii) f
> For a six-month investment, rank the following interest rates (number one being “most preferred”): 6% per annum simple interest, 6% compounded semiannually, 6% compounded quarterly. Explain your ranking.
> Explain the difference between “nominal rate of interest” and “periodic rate of interest.”
> Explain the difference between “compounding period” and “compounding frequency.”
> What does it mean to compound interest?
> If short-term interest rates do not change, what happens to a particular T-bill’s fair market value as time passes?
> If short-term interest rates have increased during the past week, will investors pay more this week (than last week) for T-bills of the same term and face value? Explain.
> Is the price of a 98-day $100,000 T-bill higher or lower than the price of a 168-day $100,000 T-bill? Why?
> If the interest rate money can earn is revised upward, is today’s economic value of a given stream of future payments higher or lower? Explain. Answer: Today’s economic value is lower. This economic value is the lump amount today that is equivalent to
> We frequently hear a news item that goes something like: “Joe Superstar signed a five-year deal worth $25 million. Under the contract he will be paid $3 million, $4 million, $5 million, $6 million, and $7 million in successive years.” In what respect is
> Solve the equations. 3 .5 x − 1 = 2.5
> What is meant by the “time value of money”?
> How can you determine which of three payments on different dates has the largest economic value?
> Under what circumstance is $100 paid today equivalent to $110 paid one year from now?
> What is meant by “equivalent payments”?
> What effect will each of the following have on a firm’s break-even point? In each case, assume that all other variables remain unchanged. 1. Fixed costs decrease. 2. Variable costs increase. 3. Sales volume increases. 4. Unit selling price decreases. 5.
> Once a business is operating beyond the break-even point, why doesn’t each additional dollar of revenue add a dollar to net income?
> What effect will each of the following have on a product’s unit contribution margin? In each case, assume that all other variables remain unchanged. 1. The business raises the selling price of the product. 2. The prices of some raw materials used in manu
> An item is marked down by the same percentage as the rate of markup on selling price. Will the reduced operating profit be positive, negative, or zero? Explain.
> Suppose an item that originally had a 40% rate of markup on cost is marked down 40%. Is its reduced selling price equal to C? Explain.
> Does a retailer break even if an item is sold at the cost C?
> Solve the equations. x + 2 5 = x + 0.8
> Under what unusual circumstance will the rate of markup on cost equal the rate of markup on selling price?
> Is it possible for the rate of markup on cost to exceed 100%? Explain.
> Is it possible for the rate of markup on selling price to exceed 100%? Explain.
> For a given dollar amount of markup, which will be the larger number: the rate of markup on cost or the rate of markup on selling price? Explain.
> If currency R strengthens relative to currency S, will the exchange rate in terms of units of S per unit of R increase or decrease? Explain.
> If currency G weakens relative to currency H, will the exchange rate in terms of units of G per unit of H increase or decrease? Explain.
> If the exchange rate in terms of units of currency P per unit of currency Q increases, which currency weakened? Explain.
> If a series of compound percent changes are all negative, is the overall percent decrease larger or smaller (in magnitude) than the sum of the individual percent changes? Justify your answer.
> If a series of compound percent changes are all positive, is the overall percent increase larger or smaller than the sum of the individual percent changes? Justify your answer.
> Solve the equations. 1.25y – 20.5 = 0.5y – 11.5
> Is it possible for a capital loss to be worse than −100%? Explain or give an example.
> Is it possible for the capital gain yield to exceed 100%? Explain or give an example.
> Can the income yield from an investment be negative? Explain or give an example.
> If the percent rate is 0.01%, what fraction is the portion of the base?
> If the percent rate is 1000%, what multiple is the portion of the base?
> What is the percent rate if a quantity is 1 1000 of the base?
> Evaluate: 0 + 3 × 3 − (32 + 10)
> Evaluate: 12 − 2 × 5 + 22 × 0
> Evaluate: 0 + 3 × 3 − 32 + 10
> Evaluate: 2 × (2 + 4) − 8
> Solve the equations. 3 .1t + 145 = 10 + 7.6t
> The introduction of a new product will require an initial investment of $550,000. The annual profit expected from the new product is forecast to be $100,000 for Years 1 to 3, $70,000 for Years 4 to 6, and $50,000 for Years 7 to 12. Should the firm procee
> Evaluate: (10 + 10) × 0
> Evaluate: 2 × 2 + 4 − 8
> Evaluate 10 + 10 × 0
> Calculate the missing values. List Price ($) = ? Discount rate (%) = 50 Discount amount ($) = ? Net price ($) = 120
> Calculate the missing values. List Price ($) = ? Discount rate (%) = ? Discount amount ($) = 20 Net price ($) = 60
> Calculate the missing values. List Price ($) = ? Discount rate (%) = ? Discount amount ($) = 20 Net price ($) = 60
> Calculate the missing values. List Price ($) = ? Discount rate (%) = 25 Discount amount ($) = 50 Net price ($) = ?
> Calculate the missing values. List Price ($) = ? Discount rate (%) = 20 Discount amount ($) = 20 Net price ($) = ?
> Calculate the missing values. List Price ($) = 50 Discount rate (%) = ? Discount amount ($) = ? Net price ($) = 45
> Calculate the missing values. List Price ($) = 200 Discount rate (%) = ? Discount amount ($) = ? Net price ($) = 150
> Solve the equations. 5(2 – c) = 10(2c – 4) – 6(3c + 1)
> Calculate the missing values. List Price ($) = 900 Discount rate (%) = 25 Discount amount ($) = ? Net price ($) = ?
> Calculate the missing values. List Price ($) = ? Discount rate (%) = 10 Discount amount ($) = ? Net price ($) = 900
> Calculate the missing values. List Price ($) = 300 Discount rate (%) = 33 13 Discount amount ($) = ? Net price ($) = ?
> Mr. and Mrs. Bond pay their three children allowances that are proportional to their ages. If their children’s ages are in the ratio 1 : 2 : 6 how much should the youngest and oldest children get as an allowance if the middle child gets $5.00 a week?
> A recipe for pasta sauce makes 6 servings with 3 cups of crushed tomatoes. How many cups of tomatoes would be needed to make 2 servings?
> Solve the proportions for the unknown quantities. m : 3 = 1 2 : 1 4
> Solve the proportions for the unknown quantities. 5 : 15 : 50 = 3 : j : k
> Solve the proportions for the unknown quantities. 3 : z = 1.5 : 4
> Solve the proportions for the unknown quantities. 7 : 2 = 21 : x
> Express ratios as an equivalent ratio whose smallest term is 1. 3 2 : 1 4
> Solve the equations. 10a + 10 = 12 + 9a
> Express ratios as an equivalent ratio whose smallest term is 1. 35 : 7 : 77
> Express ratios as an equivalent ratio whose smallest term is 1. 25 : 2.5
> Express ratios in its lowest terms. 1 3 : 1 9
> Express ratios in its lowest terms. 1 2 : 1 4
> Express ratios in its lowest terms. 0.2 : 2 : 0.02
> Express ratios in its lowest terms. 0.2 : 0.8
> Express ratios in its lowest terms. 20 : 4 : 36
> Lalita owns a 4-kg Chihuahua, a 28-kg Poodle, and a 48-kg German Shepherd. What is the ratio for the weights of the Poodle to the Chihuahua to the German Shepherd?
> A recipe for macaroni and cheese calls for 3 cups of macaroni and 1.5 cups of cheese for 6 servings. Write the ratio for servings to cheese to macaroni.
> Express ratios in its lowest terms. 5 : 75
> Evaluate expressions to six-figure accuracy. 1.03 3
> Calculate the missing values: Initial value = ? Final Value = $50 Percent change = 100
> Calculate the missing values: Initial value = $400 Final Value = ? Percent change = -50
> Calculate the missing values: Initial value = 300 cm Final Value = ? Percent change = 200
