You just won a prize, you can either receive Rs. 1000 today or Rs. 1,050 in one year. Which option do you prefer and why if you can earn 5 percent on your money?

Related Mcqs:

The market price of a firm’s stock represents the focal judgment of all market participants as to the value of the:

A. Particular market B. Particular firm C. Particular creditor D. Particular debtor...

Which of the following equation is known as Cash Flow (CF) identity?

A. CF from Assets = CF to Creditors – CF to Stockholder B. CF from Assets = CF to Stockholders – CF to Creditors C. CF to Stockholders = CF to Creditors + CF from Assets D. CF from Assets = CF to Creditors + CF to Stockholder...

Which of the following statement is CORRECT regarding compound interest?

A. It is the most basic form of calculating interest. B. It earns profit not only on principal but also on interest. C. It is calculated by multiplying principal by rate multiplied by time. D. It does not take into account the accumulated interest for calculation....

_______________refers to the extent to which fixed-income securities (debt and preferred stock) are used in a firm’s capital structure?

A. Financial risk B. Portfolio risk C. Operating risk D. Market risk...

When the market’s required rate of return for a particular bond is much less than its coupon rate, the bond is selling at:

A. Premium B. Discount C. Par D. Cannot be determined without more information...