When Interest Rates Rise, What Needs to Happen in Order

question 27

Multiple Choice

When interest rates rise, what needs to happen in order for the present value of an asset to remain the same, using a rate of return approach?

• A) The amount of the income stream needs to rise and/or cost of capital needs to rise.
• B) The amount of the income stream needs to rise and/or cost of capital needs to fall.
• C) The amount of the income stream needs to fall and/or cost of capital needs to rise.
• D) The amount of the income stream needs to fall and/or cost of capital needs to fall.

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Definitions:

Western Cultures

Cultures that are primarily associated with Europe, North America, and other places influenced by European immigration and settlement.

Indian Cultures

Diverse traditions, customs, practices, and beliefs originating from and associated with the Indian subcontinent.

Sexual Dysfunctions

Problems in experiencing sexual arousal or carrying through with sexual acts to the point of sexual arousal.

Socioeconomic Status

An individual's or group's position within a hierarchical social structure, often measured by factors like income, education, and occupation.