If the Interest Rate Is 8 Percent, Then the Present

question 185

True/False

If the interest rate is 8 percent, then the present value of $1,000 to be received in 4 years is $735.03.

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Definitions:

Maintenance Margin

The minimum amount of equity that must be maintained in a margin account to avoid a margin call, expressed as a percentage of the current market value.

Rate of Return

The upward or downward movement in the value of an investment across a chosen timeframe, expressed as a percentage of the investment's initial investment.

Margin

Describes securities purchased with money borrowed from a broker. Current maximum allowed margin on stock purchases is 50%.

Sell the Stock

An action where an investor disposes of their ownership in a corporation through the sale of its shares.