What Is the Present Value of $100 Three Years from Now

question 353

Multiple Choice

What is the present value of $100 three years from now at an interest rate of 6%?

• A) $83.96
• B) $82
• C) $94.34
• D) $119.10

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Definitions:

Risk Exposure

The quantified potential for loss in an investment or portfolio, often due to market volatility, credit risk, or operational failures.

Short

A trading strategy that involves selling a security that one does not own, with the intention to buy it back at a lower price.

Futures Contract

A standardized legal agreement to buy or sell a particular commodity or financial instrument at a predetermined price at a specified time in the future.

Underlying Asset

The financial instrument (e.g., stock, bond, commodity, or currency) on which a derivative instrument, such as an option or futures contract, is based.