The Present Value of an Expected Future Payment ________ as the Interest

question 37

Multiple Choice

The present value of an expected future payment ________ as the interest rate increases.

• A)falls
• B)rises
• C)is constant
• D)is unaffected

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Definitions:

Availability Bias

A cognitive bias where people overestimate the importance of information that is readily available to them.

Confirmation Error

A cognitive bias where individuals favor information that confirms their existing beliefs or hypotheses.

Representativeness Bias

A cognitive bias where individuals incorrectly assess the likelihood of an event based on how closely it resembles their stereotypes of a category.

Lack-of-participation Error

A common mistake in decision-making processes, where not all relevant parties are involved, leading to suboptimal outcomes.