Use the stated worksheet models
The rate question uses matched quarterly TVM frequencies. The timing question uses equal annual Cash Flow intervals. The single-sum question explicitly has no recurring payments. These are mathematical exercise conditions, not a device certification test.
Identify the changed cash-flow model
Explain which factor, date or amount differs before opening the answer. Each alternative includes a diagnosis, so a wrong choice can lead to the appropriate guide.
Try the questions
A nominal annual 6% quotation compounds quarterly. With TVM P/Y = C/Y = 4, which I/Y entry represents it?
- A.
6
- B.
1.5
- C.
0.06
Answer and explanation
Answer: A
Keep the input representation consistent with the worksheet’s rate conversion.
- A
The nominal annual percentage number is six; the matching frequencies imply 1.5% per quarter.
- B
With the same frequencies this divides the quotation a second time, implying 0.375% per quarter.
- C
This is the decimal fraction for formulas, not the entered percentage number in this state.
A receipt occurs at time three, with no flows at times one and two. What keeps that date in an equal-interval Cash Flow sequence?
- A.
Omit both zero entries
- B.
Represent two zero intervals before the receipt
- C.
Switch TVM to BGN
Answer and explanation
Answer: B
Dates are represented by the explicit entry sequence, including zero periods.
- A
The later receipt then moves earlier in the sequence.
- B
The sequence retains the elapsed intervals and correct discount exponent.
- C
That TVM setting does not move the Cash Flow worksheet entries.
A single-sum exercise has no recurring payments. Which stored value must be explicit?
- A.
PMT = 0
- B.
The previous PMT can be retained
- C.
Only the display decimals matter
Answer and explanation
Answer: A
Enter zero for the unused recurring-payment variable and verify the rest of the state.
- A
This removes recurring flows from the intended single-sum model.
- B
A leftover PMT adds unintended flows.
- C
Display precision does not remove an unwanted recurring payment.