51. The money a investor receive for taking on a risk is called
(A) risk premium
(B) risk free rate
(C) option value
(D) arbitrage

52. An asset that pays a fixed amount of cash each year for a specified number of years is called
(A) perpetuity
(B) dividend
(C) liquidity
(D) annuity

53. Net Present Value is calculated as
(A) cash inflow – cash outflow
(B) cash outflow – cash inflow
(C) PV of cash inflow – PV of cash outflow
(D) PV of cash outflow – PV of cash inflow

54. An investment should be accepted if its NPV is
(A) 0
(B) 1
(C) positive
(D) negative

55. The ratio between the amount of profit and investment is called the
(A) NPV
(B) opportunity cost
(C) risk premium
(D) rate of return

56. An investment should be accepted if

(A) Rate of Return > Opportunity Cost
(B) Rate of Return < Opportunity Cost
(C) Rate of Return = Opportunity Cost
(D) A, B and C are irrelevant

57. Governments and corporations issue bonds to

(A) borrow money
(B) lend money
(C) both A and B
(D) none of these

58. Regular interest payment to the bond holders is called
(A) principal
(B) coupon
(C) face value
(D) yield

59. At maturity the bond holders get back their principal. The principal is called
(A) coupon
(B) face value
(C) yield
(D) return

60. Any economic resource that can produce economic value to the holder is called
(A) asset
(B) return
(C) maturity
(D) yield

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