If the Discount (Or Interest) Rate Is Positive, the Future

question 122

True/False

If the discount (or interest) rate is positive, the future value of an expected series of payments will always exceed the present value of the same series.

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Definitions:

Coupon Bond

A type of bond that pays the holder periodic interest payments at a fixed rate (the coupon rate) before maturing, at which point the principal or face value is repaid.

Yield To Maturity

The total return anticipated on a bond if it is held until the maturity date, considering all interest payments and the principal repayment.

Par Value

The face value of a bond or stock as stated by the issuer, which does not necessarily reflect its market value.

Yield To Maturity

The total return anticipated on a bond if the bond is held until its maturity date.