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Question 1 of 10
1. Question
What does PPI stand for?
Correct
The Producer Price Index, known as the PPI, is calculated by the United States Department of Labor. It takes a slightly different look at the price of goods by measuring the wholesale cost of a certain set of goods over a determined period of time.
Incorrect
The Producer Price Index, known as the PPI, is calculated by the United States Department of Labor. It takes a slightly different look at the price of goods by measuring the wholesale cost of a certain set of goods over a determined period of time.
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Question 2 of 10
2. Question
What do we calculate using statistics from the Bureau of Labor?
Correct
The Consumer Price Index is calculated using statistics from the Bureau of Labor. This index, commonly known as the CPI, measures the cost of a basket of goods and services over a set time period.
Incorrect
The Consumer Price Index is calculated using statistics from the Bureau of Labor. This index, commonly known as the CPI, measures the cost of a basket of goods and services over a set time period.
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Question 3 of 10
3. Question
What does the yield graph show?
I. Yield graph shows the relationship between the interest rates and time
II. Yield graph shows the relationship between demand and supply
III. Yield graph shows the relationship between the price and demand
IV. Yield graph shows the relationship between the term to maturity and yield to maturityCorrect
A yield curve is a graph that shows the relationship between term to maturity and yield to maturity. A yield curve will show the relationship between interest rates and time, typically as relating to government Treasury securities.
Incorrect
A yield curve is a graph that shows the relationship between term to maturity and yield to maturity. A yield curve will show the relationship between interest rates and time, typically as relating to government Treasury securities.
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Question 4 of 10
4. Question
What is the effect of positive net present value on shareholder’s wealth?
Correct
Net present value, meanwhile, is the amount of cash flow, expressed in terms of present value, that a project will generate after repaying invested capital and the required rate of return on that capital. When NPV is positive, shareholder wealth increases.
Incorrect
Net present value, meanwhile, is the amount of cash flow, expressed in terms of present value, that a project will generate after repaying invested capital and the required rate of return on that capital. When NPV is positive, shareholder wealth increases.
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Question 5 of 10
5. Question
Identify the rate of return at which the net present value for a project is zero, assuming that all cash flows are reinvested.
Correct
The internal rate of return (IRR) is the rate of return at which the present value of a series of cash inflows will equal the present value of the cost of a project. It can also be described as the rate of return at which the net present value for a project is zero, assuming that all cash flows are reinvested in the internal rate of return.
Incorrect
The internal rate of return (IRR) is the rate of return at which the present value of a series of cash inflows will equal the present value of the cost of a project. It can also be described as the rate of return at which the net present value for a project is zero, assuming that all cash flows are reinvested in the internal rate of return.
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Question 6 of 10
6. Question
How do the serial payments and the annuity payments show their trend in case of inflation?
Correct
Serial payments are those that increase at a constant rate on an annual basis. The constant rate for a serial payment scheme is often the rate of inflation. Typically, then, the last serial payment will have the same purchasing power as the first. Unlike annuities, serial payments are not fixed payments. The first of the serial payments will be less than the annuity payment, but the last serial payment will be more than the annuity payment.
Incorrect
Serial payments are those that increase at a constant rate on an annual basis. The constant rate for a serial payment scheme is often the rate of inflation. Typically, then, the last serial payment will have the same purchasing power as the first. Unlike annuities, serial payments are not fixed payments. The first of the serial payments will be less than the annuity payment, but the last serial payment will be more than the annuity payment.
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Question 7 of 10
7. Question
What are the phases of life cycle?
I. Accumulation Phase
II. Consolidation Phase
III. Spending Phase
IV. Savings PhaseCorrect
The accumulation phase is typically the client’s first forty years, during which he or she wants to earn funds to help his or her family avert financial disaster; save money for homes, automobiles, and college; and develop some assets for long-term security. n the consolidation phase, individuals will have paid off all of their loans and funded the education of their children, but will need to keep saving for retirement. Individuals are usually in the consolidation phase between the ages of 40 and 60.
Incorrect
The accumulation phase is typically the client’s first forty years, during which he or she wants to earn funds to help his or her family avert financial disaster; save money for homes, automobiles, and college; and develop some assets for long-term security. n the consolidation phase, individuals will have paid off all of their loans and funded the education of their children, but will need to keep saving for retirement. Individuals are usually in the consolidation phase between the ages of 40 and 60.
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Question 8 of 10
8. Question
In which phase of life cycle, an individual will begin to seek investments that offer security and preservation of capital?
Correct
When an individual reaches the spending phase of his or her life cycle, he or she will begin to seek investments that offer security and the preservation of capital. Although individuals in this phase will want to stick with low-risk investments, it is a good idea for them to maintain some more adventurous investments as a partial protection against inflation.
Incorrect
When an individual reaches the spending phase of his or her life cycle, he or she will begin to seek investments that offer security and the preservation of capital. Although individuals in this phase will want to stick with low-risk investments, it is a good idea for them to maintain some more adventurous investments as a partial protection against inflation.
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Question 9 of 10
9. Question
What is the age group considered for the consolidation phase of life cycle?
Correct
In the consolidation phase, individuals will have paid off all of their loans and funded the education of their children, but will need to keep saving for retirement. Individuals are usually in the consolidation phase between the ages of 40 and 60.
Incorrect
In the consolidation phase, individuals will have paid off all of their loans and funded the education of their children, but will need to keep saving for retirement. Individuals are usually in the consolidation phase between the ages of 40 and 60.
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Question 10 of 10
10. Question
In which phase of life cycle, people are willing to accept high risk ventures in return of high returns?
Correct
The accumulation phase is typically the client’s first forty years, during which he or she wants to earn funds to help his or her family avert financial disaster; save money for homes, automobiles, and college; and develop some assets for long-term security. Individuals in the accumulation phase usually are willing to accept some high-risk investments if there is the promise of above-average return.
Incorrect
The accumulation phase is typically the client’s first forty years, during which he or she wants to earn funds to help his or her family avert financial disaster; save money for homes, automobiles, and college; and develop some assets for long-term security. Individuals in the accumulation phase usually are willing to accept some high-risk investments if there is the promise of above-average return.