Which of the Following Is True of the Present Value

question 7

Multiple Choice

Which of the following is true of the present value of an investment?

• A)The higher the rate of interest the higher will be the present value of an investment.
• B)Present value of an investment is an increasing function of the time period of investment.
• C)The longer the time period of investment the lower will be its present value.
• D)Present value falls less than proportionately with the length of the delay in payment.

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Definitions:

Expand

In mathematics, to rewrite an expression or equation in an extended form by distributing or multiplying out brackets.

Pascal's Triangle

A triangular array of numbers in which the edges are 1's, and each interior number is the sum of the two numbers directly above it.

Binomial Coefficient

The number of ways to choose a fixed number of elements out of a larger set, commonly represented as "n choose k."

Expansion

The process of expressing something in an extended form, often used in mathematics to denote the development of an algebraic expression or series.