The Current Worth of Future Income After It Is Discounted

question 53

Multiple Choice

The current worth of future income after it is discounted, to reflect the fact that future dollars are worth less than current dollars, is called

• A) the net present value of the income.
• B) arbitrage.
• C) the inflationary premium.
• D) the real interest rate.

---

Definitions:

Cash Dividends

Shareholder payouts from a corporation, usually sourced from the company's profits.

Insignificant Influence

A situation where an investor does not have a significant or controlling impact on the management or decision-making of an investee.

Insignificant Influence

A situation in which an investor does not have the power to govern the financial and operating policies of an investee.

Stock Investment

Purchasing shares of a company's stock to potentially earn dividends or sell at a higher price for profit, considered a form of investing.