The present value formula makes it apparent that:
A) a decline in the interest rate will cause a decision maker to weigh recent period returns relatively more heavily than before the decline.
B) an increase in the interest rate will cause a decision maker to weigh distant (or future) returns relatively more heavily than before the increase.
C) the present value of a fixed sum decreases as the time until it is to be paid increases.
D) all of the above
E) both A and C.
C
You might also like to view...
If the actual capital stock exceeds the desired capital stock due to a cycle of overbuilding, then
A) net investment will fall dramatically. B) net investment will increase dramatically. C) net investment will not change. D) the effect on net investment is unknown.
With the full implementation of the Single European Act, the EU became a
A) common market. B) free trade area. C) customs union. D) economic union. E) None of the above.
Refer to Scenario 3.1. If the price of potato chips is $0.50 and the price of Cola is $4.00, and Andy has an income of $14.50, how many units of potato chips will he consume?
A) 5 B) 6 C) 7 D) 8 E) none of the above
What fraction of the world's population lives on no more than $2 a day?
A. 1/10 B. 1/4 C. 1/2 D. 3/4