You have been promised a payment of $100,000 in the future. In which case is the present value of this future payment highest?
a. You receive the payment 2 years from now and the interest rate is 6 percent.
b. You receive the payment 2 years from now and the interest rate is 4 percent.
c. You receive the payment 3 years from now and the interest rate is 6 percent.
d. You receive the payment 3 years from now and the interest rate is 4 percent.
b
You might also like to view...
Given that most banks have positive gap and negative durations, banks prefer
A) lower market interest rates. B) higher market interest rates. C) higher market fixed rates but lower market floating rates. D) either higher or lower market interest rates since interest rates have little effect on bank profits.
Innovation refers to the introduction of new products and processes into the market
a. True b. False Indicate whether the statement is true or false
Suppose that in a closed economy GDP is equal to 20,000, consumption equal to 15,000, government purchases equal 4,000 and taxes equal 3,000 . What are private saving, public saving, and national saving?
a. -2,000, 1,000, and 2,000, respectively. b. 1,000, 2,000, and 3,000, respectively. c. 2,000, -1,000, and 1,000, respectively. d. 2,000, 1,000, and 2,000, respectively.
A recent push in development economics is to:
A. put more focus on a program's effectiveness. B. fund only those programs that prove to be effective. C. stop the trial and error process of funding programs that "might" work. D. All of these statements are true.