The Present Value of a Lump-Sum Future Amount

question 54

Multiple Choice

The present value of a lump-sum future amount:

• A)increases as the interest rate decreases.
• B)decreases as the time period decreases.
• C)is inversely related to the future value.
• D)is directly related to the interest rate.
• E)is directly related to the time period.

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Definitions:

Discrete Probability Distribution

A statistical function that represents the probability of occurrence of each value of a discrete random variable.

Sample Space

The set of all possible outcomes or events in a statistical experiment.

Flipping Three Quarters

A probabilistic experiment involving tossing three quarters and analyzing the outcomes, typically related to studying probability distributions.

Probabilities

Measures the likelihood or chance of various outcomes in a set of circumstances or an experiment.