As the Interest Rate Increases, the Present Value

question 75

Multiple Choice

As the interest rate increases, the present value

• A) increases.
• B) decreases.
• C) remains the same.
• D) Not enough information is given to tell.

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Definitions:

Depreciates

Refers to the decrease in value of an asset over time due to wear and tear, obsolescence, or age.

Canadian Dollar

The official currency of Canada, represented by the symbol CAD or the dollar sign $, sometimes with CA$ to distinguish from other dollar-denominated currencies.

Exchange Rate Risk

The potential for investors or businesses to experience losses due to changes in the currency exchange rates affecting the value of their investments or transactions.

Canadian Dollars

The official currency of Canada, represented by the symbol CAD or sometimes CA$.