Of the Four Factors That Influence Asset Demand, Which Factor

question 85

Multiple Choice

Of the four factors that influence asset demand, which factor will cause the demand for all assets to increases, everything else held constant?

• A) Wealth
• B) Expected returns
• C) Risk
• D) Liquidity

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Definitions:

Present Value

The present fiscal value of a future sum of money or sequence of cash inflows, determined by a specified rate of return.

Perpetuity

A financial instrument or investment that generates a constant stream of cash flows with no end date.

Annuity Stream

A sequence of payments made at equal intervals, such as monthly or annually.

Payments Occur

Indicates the instances or periods at which monetary transactions or installments are made.