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Dugga - MCQ 1 - Finans 1 - SU - Fek1
Dugga - MCQ 1 - Finans 1 - SU - Fek1
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Beginner
12/09/2021

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Term
Dugga 1 är en MCQ (flervalsfrågor) och görs i moodle. ingen anmälan behövs.

dugga 1 (MCQ quiz 1) has questions relating to the first three lectures. That is, up until and including the lecture on “Investment Decision Rules” and the corresponding video lectures.

Time value of money 1 till 5.
Investment Decision Rules 1 till 4.
Definition
Term
Time value of money 1 till 5.
Definition
Term
The Time Value Of Money video 1:
Definition
Term
1.1 Finical decisions 1:
What does it mean to make an "investment"?
Definition
1. Give up resources today
2. In the hope of obtaining something good in the future.
Term
1.2 Finical decisions 2:
What´s inside the timelines?
Definition
Periods (Years), Initial investments (at the start), Net cash flows.
Term
1.3 Finical decisions 3:
We always consider (Net)cash flows and in comparable terms.
Definition
We don´t want to compare an investment in a building vs time spent on a lecture.
Term
2.1 Time value of money video 1:
What´s the assumption of "Time value of money"
Definition
Assumption:
Money recieved today is worth more than money recieved tomorrow.
Term
2.2 Time value of money video 1:
What the three reasons why we can assum that "Money recieved today is worth more than money recieved tomorrow."
Definition
Inflations -
Interest -
Uncertainty -
Term
2.3 Time value of money video 1:
What´s the math modell/formula to calculate "Future value of a cash flow"?
Definition
Future value = FV = C*(1+r)^N
C = Present Cashflow
r = Interest rate/
n = "Years or periods into the future"
Term
2.4 Time value of money video 1:
What´s the math modell/formula to calculate "present value of a cash flow"?

When you want the present value of a future value.
Definition
Present value = PV = C / (1+r)^n
C = "Future value"
r = Interest rate
n = number of periods
Term
2.5 Time value of money video 1: (överkurs)
How is the interest rate determined?
Definition
It should reflect at least,
Inflation.
Other investment opportunities.
Risk.
Term
2.6 Time value of money video 1:
What are the 3 different names for interest rate?
Definition
Discount rate.
Cost Of Capital.
Hurdle rate.
Term
The Time Value Of Money video 2:
Definition
Term
Time value of money video 2:
How do you calculate Net Present Value?
Definition
Net Present Value = NPV
NPV = PV (Positive) - PV (Negative) =
= PV (All cash flows)

All cashflow summarized together - initial outlay = NPV.
Term
Time value of money video 2:
What is annuity?
Definition
Annuity is when, cashflows are of equal big size (the initial outlay does not need to be as big) and exactly one period between every cash flow.
Term
Time value of money video 2:
What is the calculation for a net present value of a annuity?
Definition
C/r * (1- 1/(1+r)^n) = Net Present Value Of A Annuity?

Important!
C = "first cash flow" in the model.
r = interest rate
N = the amount of cash flows
Term
The Time Value Of Money video 3:
Present value of a growing annuity.
Definition
Term
Present value of a growing annuity:

allows us to compute the present value of a growing annuity with a single formula.
But what are the requirements?
Definition
the growth between any two consecutive (i följd) cashflows need to be equally long between every cashflow.
Term
What is the formula for "present value of a growing annuity"?
Definition
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