The price of a financial asset equals the
A) future value of all payments
B) sum of all payments
C) present value of all future payments
D) difference between the future value and present value of all payments
C
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Computing the CPI is important because ________
A) it is a very accurate and error-free measure of the cost of living B) it helps predict spending patterns for particular goods and services C) government uses it to index entitlements, such as social security benefits, so that beneficiaries do not lose purchasing power in periods of inflation D) all of the above E) none of the above
Accountants and Economists differ in their calculations of profits in that the former consider
a. sunk costs b. implicit costs only c. explicit costs only d. fixed costs
A ______ cost is ______ if the firm incurs the cost even if it produces no output.
A. fixed; sunk B. fixed; explicit C. variable; sunk D. fixed; avoidable
Which statement is false?
A. Differences in wage rates are partially explained by differences in productivity. B. In general, when output per labor-hour increases, real wages rise by a larger percentage. C. The demand for labor in a particular market is the sum of all the firms' MRP curves. D. If you are earning $20,000 a year today and you were to earn $40,000 a year 10 years from now, your money wages have increased.