Skip to ContentGo to accessibility pageKeyboard shortcuts menu
OpenStax Logo
Principles of Finance

Multiple Choice

Principles of FinanceMultiple Choice

1 .
The most basic type of financial transaction involves _______________.
  1. an amount of money that is not invested
  2. a series of equal installment amounts paid or received over a period of time
  3. a simple, one-time amount of cash that can be either a receipt or a payment
  4. None of the above
2 .
If a discount (or interest) rate has a positive value, then the future value of any amount deposited in an interest-bearing account will _______________.
  1. be less than the present value
  2. be equal to the present value
  3. be greater than the present value
  4. decline over time
3 .
If the discount (or interest) rate used to calculate the present value of a future payment increases, the calculated present value will do which of the following?
  1. Increase
  2. Decrease
  3. Remain the same
  4. Increase as the period of time shortens
4 .
The discount rate that is required to equate a future payment of $500 in three years to a present value of $400 is _______________.
  1. 4.7%
  2. 6.5%
  3. 7.7%
  4. 8.8%
5 .
If compounding periods increase in frequency and all else remains the same, the dollar values of any resulting future value calculations will _______________.
  1. increase
  2. remain the same
  3. decrease
  4. None of the above
Order a print copy

As an Amazon Associate we earn from qualifying purchases.


This book may not be used in the training of large language models or otherwise be ingested into large language models or generative AI offerings without OpenStax's permission.

Want to cite, share, or modify this book? This book uses the Creative Commons Attribution License and you must attribute OpenStax.

Attribution information
  • If you are redistributing all or part of this book in a print format, then you must include on every physical page the following attribution:
    Access for free at
  • If you are redistributing all or part of this book in a digital format, then you must include on every digital page view the following attribution:
    Access for free at
Citation information

© Jan 8, 2024 OpenStax. Textbook content produced by OpenStax is licensed under a Creative Commons Attribution License . The OpenStax name, OpenStax logo, OpenStax book covers, OpenStax CNX name, and OpenStax CNX logo are not subject to the Creative Commons license and may not be reproduced without the prior and express written consent of Rice University.