Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

7. Receivables and Investments

Introduction to Investments in Securities

Financial Accounting

7. Receivables and Investments

Introduction to Investments in Securities

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Multiple Choice

In the context of investments in securities, a fixed-rate mortgage means your payment and interest rate won't:

increase only if the market interest rates rise

change over the life of the loan

decrease if you make extra payments

be affected by inflation

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Verified step by step guidance

Understand the concept of a fixed-rate mortgage: A fixed-rate mortgage is a type of loan where the interest rate remains constant throughout the life of the loan, regardless of changes in market interest rates or inflation.

Analyze the first option: 'Your payment and interest rate won't increase only if the market interest rates rise.' This statement is partially correct but does not fully capture the essence of a fixed-rate mortgage, as the rate does not change under any circumstances.

Evaluate the second option: 'Your payment and interest rate won't change over the life of the loan.' This is the correct description of a fixed-rate mortgage, as the interest rate and payment amount remain fixed for the duration of the loan term.

Consider the third option: 'Your payment and interest rate won't decrease if you make extra payments.' While making extra payments can reduce the principal balance and potentially shorten the loan term, it does not affect the fixed interest rate or payment structure.

Assess the fourth option: 'Your payment and interest rate won't be affected by inflation.' While inflation can impact the real value of money, it does not alter the fixed interest rate or payment amount in a fixed-rate mortgage.