When the Present Value of a Note's Promised Cash Flows

question 55

Multiple Choice

When the present value of a note's promised cash flows is equal to the note's face value:

• A)the note is issued at a discount
• B)the note is issued at a premium
• C)the market rate of interest is less than the face rate of interest
• D)the face rate of interest and the market rate of interest are the same

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Definitions:

Correlational

Pertaining to a research method that examines the relationship between two or more variables to determine if they are associated.

Experimental Study Designs

Research methods that allow investigators to directly manipulate variables to investigate cause-and-effect relationships between variables.

Line of Best Fit

A straight line drawn through the center of a group of data points plotted on a scatter plot, used to analyze and predict the relationship between variables.

Correlational Study

A research method that examines the relationship between two or more variables to determine whether a change in one variable is associated with a change in another.