The Choice of a Discount Rate Is Influenced by

question 6

Multiple Choice

The choice of a discount rate is influenced by

• A) time preference.
• B) whether the effects cross generations.
• C) the rate of inflation.
• D) all of the above.

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Definitions:

Shares

Ownership stakes in a company or financial asset which entitle the holder to a proportional share of the profits, distributed as dividends, if they are announced.

Standard Deviation

A statistical measure of the dispersion or variability of a set of data points around the mean, commonly used to quantify the amount of variation.

Average Rate

The mean value of a set of rates, capturing the central tendency over a specified period or dataset.

Probability

A measure of the likelihood that an event will occur, expressed as a number between 0 and 1.