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Question 1 of 10
1. Question
Investment advisors and consultants must understand the mathematics behind the concepts in the area of which of the following?
I. Financial support
II. Time value of money
III. Equity value of money
IV. Marketing valuesCorrect
Investment advisors and consultants must understand the mathematics behind the concepts in the area of time value of money.
Incorrect
Investment advisors and consultants must understand the mathematics behind the concepts in the area of time value of money.

Question 2 of 10
2. Question
Investment advisors and consultants should be able to perform calculations with which of the following?
I. By hand
II. With a spreadsheet
III. Computer program
IV. Financial calculatorCorrect
Investment advisors and consultants must understand the mathematics behind the
concepts in the area of time value of money. They should be able to perform calculations
by hand or with the help of a spreadsheet, computer program, or on their
financial calculator.Incorrect
Investment advisors and consultants must understand the mathematics behind the
concepts in the area of time value of money. They should be able to perform calculations
by hand or with the help of a spreadsheet, computer program, or on their
financial calculator. 
Question 3 of 10
3. Question
Investment advisors and consultants should not only understand basic economic principles, but they should possess the skills necessary to do which of the following?
I. Predict stock prices
II. Discover market trends
III. Provide professional comments
IV. Analyze economic dataCorrect
Investment advisors and consultants should not only understand basic economic principles, but they should possess the skills necessary to analyze economic data.
Incorrect
Investment advisors and consultants should not only understand basic economic principles, but they should possess the skills necessary to analyze economic data.

Question 4 of 10
4. Question
Evaluating financial transactions requires valuing which of the following?
I. present values
II. current cash values
III. uncertain future cash flows
IV. future cash valuesCorrect
Evaluating financial transactions requires valuing uncertain future cash flows; that is, determining what uncertain cash flows are worth at different points in time.
Incorrect
Evaluating financial transactions requires valuing uncertain future cash flows; that is, determining what uncertain cash flows are worth at different points in time.

Question 5 of 10
5. Question
Which of the following is(are) the compensation for the opportunity cost of funds and the uncertainty of repayment of the amount borrowed?
I. Compound value
II. Future value
III. Inflation
IV. InterestCorrect
Interest is the compensation for the opportunity cost of funds and the uncertainty of repayment of the amount borrowed; that is, it represents both the price of time and the price of risk.
Incorrect
Interest is the compensation for the opportunity cost of funds and the uncertainty of repayment of the amount borrowed; that is, it represents both the price of time and the price of risk.

Question 6 of 10
6. Question
If you borrow $1,000 today for two years and the interest is 5 percent compound interest, at the end of two years you must repay the $1,000, plus interest which is a total of?
I. $1100
II. $1200
III. $1102.5
IV. $1105Correct
if you borrow $1,000 today for two years and the interest is 5 percent compound interest, at the end of two years
you must repay the $1,000, plus interest on the $1,000 for two years and interest on the interest. The amount you repay at the end of two years is $1,102.50:Incorrect
if you borrow $1,000 today for two years and the interest is 5 percent compound interest, at the end of two years
you must repay the $1,000, plus interest on the $1,000 for two years and interest on the interest. The amount you repay at the end of two years is $1,102.50: 
Question 7 of 10
7. Question
Which of the following is(are) the financing arrangement in which the amount repaid is the principal amount and interest on the principal amount?
I. Simple interest
II. Compound interest
III. Future interest
IV. Basic interestCorrect
Simple interest is the financing arrangement in which the amount repaid is the principal amount and interest on the principal amount.
Incorrect
Simple interest is the financing arrangement in which the amount repaid is the principal amount and interest on the principal amount.

Question 8 of 10
8. Question
What is the total amount of $10,000 borrowed at 5 percent simple interest that is repaid after two years?
I. $11,000
II. $11,025
III. $11,002.5
IV. $11,250Correct
if you borrow $10,000 at 5 percent simple interest and repay the loan after two years, you must repay the $10,000, plus two periods interest at 5 percent: Repayment with simple interest = $10,000 + [$10,000 × 2 × 0.05]
= $11,000Incorrect
if you borrow $10,000 at 5 percent simple interest and repay the loan after two years, you must repay the $10,000, plus two periods interest at 5 percent: Repayment with simple interest = $10,000 + [$10,000 × 2 × 0.05]
= $11,000 
Question 9 of 10
9. Question
Which of the following is(are) components of compound interest?
I. The amount borrowed
II. The interest on the amount borrowed
III. The interest on the amount borrowed with inflation
IV. The interest on interestCorrect
In the case of compound interest, the amount repaid has three components:
1. The amount borrowed
2. The interest on the amount borrowed
3. The interest on interestIncorrect
In the case of compound interest, the amount repaid has three components:
1. The amount borrowed
2. The interest on the amount borrowed
3. The interest on interest 
Question 10 of 10
10. Question
You invest $1,000 in an account today that pays 6 percent interest, compounded annually. How much will you have in the account at the end of ten years if you make no withdrawals?
I. $1,795.60
II. $1,780.95
III. $1,790.85
IV. $1,707.50Correct
FV10 = $1,000(1 + 0.06)10 = $1,000(1.7908) = $1,790.85
Incorrect
FV10 = $1,000(1 + 0.06)10 = $1,000(1.7908) = $1,790.85