Which One of the Following Statements Correctly States a Relationship

question 19

Multiple Choice

Which one of the following statements correctly states a relationship?

• A)Time and future values are inversely related, all else held constant.
• B)Interest rates and time are positively related, all else held constant.
• C)An increase in the discount rate increases the present value, given positive rates.
• D)An increase in time increases the future value given a zero rate of interest.
• E)Time and present value are inversely related, all else held constant.

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Definitions:

Insurance

A financial product that provides protection against financial losses from various risks like accidents, illnesses, or property damage.

Guaranteed Income

A system of social welfare provision that guarantees that all citizens or families have an income sufficient to live on, provided they meet certain conditions.

Expected Total Utility

The sum of satisfaction or benefit that a consumer anticipates receiving from consuming different quantities of goods and services.

Utility

The satisfaction or benefit derived by consuming a product; thus the desire to obtain a good or service.