Considering the Value of a Financial Instrument, the More Likely

question 97

Multiple Choice

Considering the value of a financial instrument, the more likely it is the payment will be made:

• A) the more valuable the financial instrument.
• B) the less valuable is the instrument because risk is lower.
• C) the less valuable is the financial instrument because it is highly liquid.
• D) the greater the uncertainty; therefore the less valuable is the financial instrument.

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Definitions:

Lowest Terms

The simplest form of a fraction, where the numerator and denominator are reduced to their smallest values.

Purchasing Power

The value of currency expressed in terms of the amount of goods or services that one unit of money can buy.

CPI

This index, named the Consumer Price Index, assesses the cumulative weighted prices of a collection of consumer-related goods and services, with categories including transportation, healthcare, and food.

Property Tax

A tax on property, usually real estate, that owners pay to local governments, based on the assessed value of the property.