Chapter Review: True or False Quiz

This online quiz contains 7 questions. Click on the button next to the selection that best answers the question. To review your results, click on the Submit Answers button displayed after the last question. Good luck!

1		Rate of return is defined as the rate of interest paid on the principal of a loan or investment.
			A)	TRUE
			B)	FALSE
2		It makes no difference in the final answer whether a rate of return equation is written in terms of P, A, or F.
			A)	TRUE
			B)	FALSE
3		In simplifying cash flow for the purpose of estimating the rate of return, moving a uniform series of receipts to the present as a single value will yield an estimated interest rate that is lower than the actual one.
			A)	TRUE
			B)	FALSE
4		If the algebraic signs on the cash flows change more than once, the cash flow series is said to be non-conventional.
			A)	TRUE
			B)	FALSE
5		When using the rate of return method, multiple i* values can always be determined when the rule of signs (Descartes' rule) has more than one change in algebraic signs.
			A)	TRUE
			B)	FALSE
6		If the cumulative cash flow series changes sign three times, this means that there is one real and two imaginary interest rate values that satisfy the equivalence equation.
			A)	TRUE
			B)	FALSE
7		When multiple rates of return are indicated for a cash flow series, it is necessary to have a reinvestment rate that is exactly equal to an i* (that balances the ROR relation) in order to determine the unique composite rate of return i'.
			A)	TRUE
			B)	FALSE