**Time Value of Money MCQs**

**Previous Practice: Finance Basics MCQs**

**Next Practice: Future Value of a Single Amount MCQs**

**MCQs 1-10**

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#### 1. Interest paid (earned) on only the original principal borrowed (lent) is often referred to as?

Correct!
Wrong!

#### 2. Treasury bills are?

Correct!
Wrong!

#### 3. Nominal Interest Rate is also known as?

Correct!
Wrong!

#### 4. The concept of compound interest refers to?

Correct!
Wrong!

#### 5. The value of money to be received in the future is _______the value of the same amount of money in hand today?

Correct!
Wrong!

#### 6. The Time value of money must be considered in total outlay decision because?

Correct!
Wrong!

#### 7. Interest paid (earned) on both the original principal borrowed (lent) and previous interest allowed (earned) is often referred to as __________?

Correct!
Wrong!

#### 8. Money has time value because?

Correct!
Wrong!

#### 9. The real rate of interest reflects compensation for?

Correct!
Wrong!

#### 10. Interest has 3 types?

Correct!
Wrong!

Time Value of Money MCQs (1-10)

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**MCQs 11-20**

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#### 11. The basic rule of the time value of money is?

Correct!
Wrong!

#### 12. A decrease in the supply for loanable funds, holding demand constant, will cause interest rates to?

Correct!
Wrong!

#### 13. The value of money results from?

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Wrong!

#### 14. The basic price that equates the demand for and supply of loanable funds in the financial markets is the _______?

Correct!
Wrong!

#### 15. If the interest rate is greater than 0%, then a dollar today is worth?

Correct!
Wrong!

#### 16. In an inflationary period, interest rates have a tendency to?

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#### 17. Which of the following is not a determinant of market interest rates?

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#### 18. An unexpected increase in inflation should?

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#### 19. If the interest rate is less than 0%, then a dollar today is worth?

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Wrong!

#### 20. The risk-free interest rate is composed of?

Correct!
Wrong!

**References**

Financial Management: Theory and Practice, Dr Eugene F Brigham & C Micheal Ehrhardt

Fundamentals of Financial Management: Concise Edition, Brigham Houston

The Economist Guide to Financial Management, John Tennet

Financial Management: Core Concepts, Raymond M Brooks

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