Chapter 8: Quantitative Concepts

Question 0

What is return to the lender or cost to borrower when interest is assumed to add to original principal?

Answer 0

Compound interest

Question 1

What is cost to borrow or rate of return to lender per period on original principal?

Answer 1

Simple interest rate

Question 2

What is present value of future cash flows or returns less the present value of the cost of the investment?

Answer 2

Net present value

Question 3

What is most commonly used measure that is simple idea of average that is most familiar to people?

Answer 3

Arithmetic mean

Question 4

What is the most frequently occurring value in a data set?

Answer 4

Mode

Question 5

What is the average that is compounded return for each period?

Answer 5

Geometric mean

Question 6

What is relationship between two variables?

Answer 6

Correlation

Question 7

What is measure of the correlation between successive returns for a single security or portfolio over time?

Answer 7

Autocorrelation or serial correlation