A 100 annuity is (Multiple Choice)

A 100 annuity is
 a. 100 received in a single year
  b. 100 received each year forever
  c. more or less than 100, dependent on the interest rate, received for a certain number of years
  d. 100 received each year for a certain number of years
  e. more or less than 100, dependent on the interest rate, received until an upper limit is reached

QUESTION 2

If Europe and the United States were the only two regions in the world, then U.S. residents might desire to buy euros for all except one of the following reasons. Which is the exception?
 a. to invest in Europe
  b. to buy European goods
  c. to improve the U.S. balance of payments
  d. to make loans in Europe
  e. to buy European stocks

QUESTION 3

You expect to rent out a vacation home on Sanibel Island for 800 a month as an investment. Upkeep is estimated at 3,000 a year. If the current market interest rate is 5 percent, you are willing to pay __________ for the house.
 a. 132,000
  b. 100,000
  c. 160,000
  d. 192,000
  e. 800,000

QUESTION 4

The demand curve for foreign exchange
 a. slopes downward
  b. slopes upward
  c. is horizontal, because no individual country can influence the price of foreign exchange
  d. is vertical, because no individual country can influence the price of foreign exchange
  e. may slope downward or upward

QUESTION 5

A given sum of money received each year for a specific number of years is called a(n)
 a. bond
  b. perpetuity
  c. debt
  d. discount
  e. annuity

QUESTION 6

The demand curve for euros shows
 a. a direct relationship between the dollar price of a euro and the quantity of euros demanded
  b. an inverse relation between the dollar price of a euro and the quantity of euros demanded
  c. that the higher the dollar price of a euro, the greater the quantity demanded
  d. that the more expensive it is to buy euros, the larger the quantity of European goods demanded by Americans
  e. that the dollar price of the euro is being held fixed by the European Union

QUESTION 7

If Andre Preneur puts together a company that yields a profit of 40,000 per year and this profit stream is expected to continue indefinitely, what price can he sell the company for if the discount rate equals 8 percent?
 a. 40,000
  b. 60,000
  c. 100,000
  d. 250,000
  e. 500,000

QUESTION 8

The U.S. demand curve for foreign currency is drawn holding constant all except one of the following factors. Which is the exception?
 a. income in the United States
  b. the inflation rate in the United States
  c. incomes in the rest of the world
  d. the interest rate in the United States relative to the rest of the world
  e. tastes and preferences of Americans for foreign goods