Which of the Following Investments Has a Higher Present Value,assuming

question 63

Multiple Choice

Which of the following investments has a higher present value,assuming the same (strictly positive) interest rate applies to both investments?

• A) Investment X has a higher present value.
• B) Investment Y has a higher present value.
• C) Investment X and Investment Y have the same present value, since the total of the cash flows is the same for both.
• D) Investment Y has half the present value of Investment X.
• E) No comparison can be made - we need to know the interest rate to calculate the present value.

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Definitions:

Recognition

Ability to identify a previously encountered stimulus.

Major Term

In a categorical syllogism, the term that occurs in the predicate of the conclusion.

Syllogism

An argument involving a sequence of three propositions where the first two serve as the basis for the third, demonstrating a logical relationship.

Mammals

Warm-blooded vertebrate animals characterized by the presence of mammary glands, which females use to nurse their young; also notable for having hair or fur.