If Two Variables Are Positively Related

question 9

Multiple Choice

If two variables are positively related:

• A)as one goes up in value, the other must go up in value, too.
• B)as one goes up in value, the other must go down in value.
• C)there is always a trade-off between the two.
• D)one variable is always the reciprocal of the other.

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Definitions:

Discount Rate

The discount rate is the interest rate used to determine the present value of future cash flows in discounted cash flow (DCF) analysis, essentially reflecting the cost of capital or the risk of the investment.

Cash Flows

The net amount of cash being transferred into and out of a business, essential for assessing its financial health.

Principle Due

refers to the outstanding balance of the principal amount of a loan or mortgage that needs to be paid.

Loan Terms

The conditions and agreements under which a loan will be made, including the interest rate, repayment schedule, and duration of the loan.