You Are Expecting to Receive $750 at Some Time in the Future.Which

question 72

Multiple Choice

You are expecting to receive $750 at some time in the future.Which of the following would unambiguously decrease the present value of this future payment?

• A)Interest rates rise and you get the payment sooner.
• B)Interest rates rise and you have to wait longer for the payment.
• C)Interest rates fall and you get the payment sooner.
• D)Interest rates fall and you have to wait longer to get the payment.

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Definitions:

Capacitance

The ability of a system to store an electric charge, quantitatively measured in farads (F).

Hz

Hertz, a unit of frequency equivalent to one cycle per second.

RC Parallel Circuit

A circuit consisting of a resistor (R) and a capacitor (C) connected in parallel with each other across a voltage source.

Resistor Voltage

The voltage across a resistor, determined by the current flowing through it and its resistance value.