QUESTION 1

The future value of the stream of cash flows based on the following data:

rate: 5%
nper: 10
pmt: $0
pv: -$1,000
type: 0

is:

$1,100

 

 True

 False

 

QUESTION 2

The future value of the stream of cash flows based on the following data:

rate: 5%
nper: 10
pmt:  -$100
pv: -$1,000
type: 0

is:

$2,785.54

 

 True

 False

QUESTION 3

The future value of the stream of cash flows based on the following data:

rate: 5%
nper: 10
pmt:  -$100
pv: -$1,000
type: 0

is:

$2,785.54

 

 True

 False

QUESTION 4

The future value of the stream of cash flows based on the following data:

 rate:  8%

 

nper:  20

 

pmt:  ($300)

 

pv:  ($2,000)

 

type:  0

 

 is:

The future value of the stream of cash flows based on the following data:

 

rate:  8%

 

nper:  20

 

pmt:  ($300)

 

pv:  ($2,000)

 

type:  0

 

 

is:

$23,050.50  

 

 

True

Flase

 

QUESTION 5

Inflation erodes the real rate of return that you earn on your savings. If you expect 5% inflation in each of the next five years your real wealth will decline if it is all invested in assets that earn a 4% annual rate of return.

 

 True

 False

QUESTION 6

If you contribute to a 401(K) defined contribution plan your wealth grows at the six month U.S. Treasury bill (t-bill) rate.  

 

 True

 False

 

QUESTION 7

There is no limit to how much an individual can contribute to a 401(K) plan each year.

 

 True

 False

 

 

 QUESTION 8

There are no limits to how much an employer can contribute to an employee’s 401(K) plan each year.

 

 True

 False

QUESTION 9

The great thing about 401(K) retirement plans is that plan distributions are never taxed.

 

 True

 False

 

 

 

QUESTION 10

If you have a 401(K) plan you are required to begin making withdrawals from the plan on April first of the year after you turn 70.5 years of age.

 

 True

 False