Suppose the Nominal Interest Rate Is Zero

question 5

Multiple Choice

Suppose the nominal interest rate is zero. In this situation, the present discounted value of a finite sequence of future payments is equal to which of the following:

• A) the sum of zero.
• B) the square of the sum of all payments.
• C) the sum of all the payments divided by the rate of inflation.
• D) the sum of all payments.
• E) the average value of each payment.

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Definitions:

NADH

Nicotinamide adenine dinucleotide (NADH) is a coenzyme found in all living cells, involved in redox reactions and energy production through cellular respiration.

Glycolysis

The metabolic pathway that breaks down glucose into pyruvate, releasing energy and pyruvic acid, occurring in the cytoplasm of cells.

Niacin

Also known as Vitamin B3, it is essential for converting food into energy, maintaining skin health, and supporting the nervous and digestive systems.

Pellagra

A vitamin deficiency disease most commonly caused by a lack of niacin (vitamin B3) in the diet, leading to dermatitis, diarrhea, dementia, and even death if untreated.