The Concept of Compound Interest Refers To

question 90

Multiple Choice

The concept of compound interest refers to:

• A)Earning interest on the original investment
• B)Payment of interest on previously earned interest
• C)Investing for a multi-year period of time
• D)Determining the APR of the investment

---

Definitions:

Forward Contract

A specialized agreement crafted between two parties to transact an asset at a certain price on a future agreed date.

ASPE

Accounting Standards for Private Enterprises, a set of accounting principles and standards in Canada designed for private companies.

Exchange Rate

The price at which one currency can be exchanged for another currency in the foreign exchange market.

Cash Flow Hedge

A type of hedge that is used to manage exposure to variability in cash flows, typically associated with forecasted transactions that might affect profit or loss.