The Difference in Present Value Between a Perpetuity That Promised

question 11

Multiple Choice

The difference in present value between a perpetuity that promised $1 per year starting today and one that promised $1 per year starting next year is

• A)0.
• B)$1.
• C)$1/(1 + r).
• D)$r/(1 + r).

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Definitions:

Negative Reinforcer

An unpleasant stimulus that, when removed after a response, increases the likelihood of that response occurring in the future.

Classically Conditioned

A learning process that occurs when two stimuli are repeatedly paired; a response that is at first elicited by the second stimulus is eventually elicited by the first stimulus alone.

Generalized Anxiety Disorder

A mental health disorder characterized by persistent and excessive worry about different aspects of life.

Intolerance Of Uncertainty

A psychological trait characterizing individuals who experience significant discomfort or anxiety in situations where uncertainty prevails, impacting decision-making and coping mechanisms.