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Present Value of a Future Sum Increases as Either the Discount

question 25

True/False

present value of a future sum increases as either the discount rate or the number of periods per year increases, other things held constant.


Definitions:

Beta

An indicator of a stock's fluctuation in comparison to the general market, denoting its relative risk to the average market movement.

Diversification

A risk management strategy that involves spreading investments across various financial instruments, industries, or other categories to reduce exposure to any single asset or risk.

Risk-Averse Investors

Investors who prioritize minimizing risk over maximizing returns, often choosing safer, lower-yield investments.

Uncertainty

The state of having limited knowledge where it is impossible to exactly describe the existing state, a future outcome, or more than one possible outcome.

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