The Basic Price That Equates the Demand for and Supply

question 145

Multiple Choice

The basic price that equates the demand for and supply of loanable funds in the financial markets is the __________:

• A) interest rate
• B) yield curve
• C) term structure
• D) cash price

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Definitions:

NPV

Net Present Value; a calculation used to estimate the value of an investment, considering the present value of its future cash flows.

Option To Wait

The choice to delay an investment or decision, which might carry value by allowing more information to be gathered, potentially leading to a better informed decision.

Discounted Cash Flow

A valuation method used to estimate the value of an investment based on its expected future cash flows, adjusted for the time value of money.

Projected Cash Flows

Estimates of the amount of money expected to move in and out of a business over a specified period in the future.