Suppose That the Present Value of Receiving a Guaranteed $450

question 28

Multiple Choice

Suppose that the present value of receiving a guaranteed $450 in two years is $385.80.The opportunity rate of return on similar risk investments is 8 percent.According to this information, all else equal, which of the following statements is correct?

• A)It always would be preferable to wait two years to receive the $450 because this value is greater than the present value.
• B)Risk averse investors always would prefer to take the $385.80 today because it is a guaranteed amount whereas there is uncertainty as to whether the future amount will be paid.
• C)No investor should be willing to pay more than $385.80 for such an investment.
• D)It is apparent the present value was computed incorrectly because the present value of a future amount always should be greater than the future value.
• E)None of the above is a correct answer.

Understand the social and environmental factors that contribute to stress in minority groups.

Understand prevention strategies for managing psychological disorders.

Understand the role of HR in supporting various organizational strategies.

Identify the unique human resource management challenges associated with different corporate strategies.

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Definitions:

Social Support

Refers to the perception and actuality that one is cared for, has assistance available from other people, and is part of a supportive social network.

Buffer

A tool or process that reduces the impact of fluctuations or transitions in a system, providing a form of stabilization or protection.

Effective

Producing the intended or desired result.

Explanatory Style

An individual's habitual way of explaining events, which can impact their outlook and mental health.