Present Value Is

question 71

Multiple Choice

Present value is:

• A) how much a certain amount of money that will be obtained in the future is worth today.
• B) how much a certain amount of money that you have in the present will be worth in the future.
• C) the process of accumulation of additional interest paid on interest that has already been earned.
• D) how much a certain amount of money needs to be discounted to be meaningful.

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Definitions:

Standard Normal Random Variable

A special case of the normal distribution with a mean of zero and a standard deviation of one.

Probability

The measure of the likelihood that an event will occur, expressed as a number between 0 and 1, where 0 indicates impossibility and 1 indicates certainty.

z

A standard score representing the number of standard deviations an observation or datum is above or below the mean of what is being observed or measured.

Standard Normal

An ordinary distribution with a 0 mean and a 1 standard deviation.