Trial and Error Is the Only Way to Compute the Internal

question 97

True/False

Trial and error is the only way to compute the internal rate of return (IRR) when interest is calculated over five or more periods.

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Definitions:

Bonds

Financial instruments representing a loan made by an investor to a borrower, typically corporate or governmental, with terms specifying interest payments and the return of principal at maturity.

Par Value

The nominal or face value of a security or stock, which is stated in the corporate charter.

Interest Accrued

Interest that has been incurred but not yet paid, recorded as a liability on the balance sheet.

Cash Dividends

Payments made by a company out of its earnings to its shareholders in the form of cash.