Type of Financial Security Which Have Linked Payoff to Another

question 18

Multiple Choice

Type of financial security which have linked payoff to another issued security is classified as

• A)linked security
• B)derivative security
• C)payable security
• D)non-issuing security

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Definitions:

Present Value Index

A financial metric used to calculate the present value of all cash inflows and outflows associated with an investment, compared to its initial cost.

Net Present Value

A financial metric that calculates the value of a project or investment by discounting all expected future cash flows to the present using a particular rate of return.

Net Present Value

The variance between the net present value of incoming cash and outgoing cash within a set timeframe.

Net Cash Flows

The amount of cash generated or used by a business during a given period, calculated as cash received minus cash spent.