The Present Value Model of Investment States That an Asset's

question 233

Multiple Choice

The present value model of investment states that an asset's current price should be equal to the

• A) sum of the present values of all of its future payments or earnings.
• B) sum of all of its future payments or earnings times the number of years of its life.
• C) life of the asset times the present values of all of its future payments or earnings.
• D) present values of all of its future payments or earnings divided by its life in years.

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