Which of the following statement is CORRECT regarding compound interest?

Related Mcqs:

1. Which of the following statement is TRUE regarding debt?

   A. Debt is an ownership interest in the firm.
   B. Unpaid debt can result in bankruptcy or financial failure.
   C. Debt provides the voting rights to the bondholders.
   D. Corporation’s payment of interest on debt is fully taxable.

2. If you plan to save Rs. 5,000 with a bank at an interest rate of 8%, what will be the worth of your amount after 4 years if interest is compounded annually?

   A. Rs. 5,400
   B. Rs. 5,900
   C. Rs. 6,600
   D. Rs. 6,802

3. A standardized financial statement presenting all items of the statement as a percentage of total is:

   A. a common-size statement
   B. an income statemen
   C. a cash flow statement
   D. a balance sheet

4. Which of the following strategy belongs to restrictive policy regarding size of investments in current assets?

   A. To maintain a high ratio of current assets to sales
   B. To maintain a low ratio of current assets to sales
   C. To less short-term debt and more long-term debt
   D. To more short-term debt and less long-term debt

5. The situation in which the investment bank faces no risk of mispricing regarding security is considered as __________?

   A. least good premium
   B. least good discount price
   C. best efforts offering
   D. least good index

6. Which one of the following terms refers to the risk arises for bond owners from fluctuating interest rates?

   A. Fluctuations Risk
   B. Interest Rate Risk
   C. Real-Time Risk
   D. Inflation Risk

7. Which of the following costs are reported on the income statement as the cost of goods sold?

   A. Product cost
   B. Period cost
   C. Both product cost and period cost
   D. Neither product cost nor period cost

8. Which of the following set of ratios relates the market price of the firm’s common stock to selected financial statement items?

   A. Liquidity Ratios
   B. Leverage Ratios
   C. Profitability Ratios
   D. Market Value Ratios

9. Which of the following statement is considered as the accountant’s snapshot of firm’s accounting value as of a particular date?

   A. Income Statement
   B. Balance Sheet
   C. Cash Flow Statement
   D. Retained Earning Statement

10. Which of the following statement about bond ratings is TRUE?

    A. Bond ratings are typically paid for by a company’s bondholders.
    B. Bond ratings are based solely on information acquired from sources other than the bond issuer.
    C. Bond ratings represent an independent assessment of the credit-worthiness of bonds.
    D. None of the given options