How Are Present Values Affected by Changes in Interest Rates

question 91

Multiple Choice

How are present values affected by changes in interest rates?

• A) The lower the interest rate, the larger the present value will be.
• B) The higher the interest rate, the larger the present value will be.
• C) Present values are not affected by changes in interest rates.
• D) One would need to know the future value in order to determine the impact.

---

Definitions:

Flexibility

The ability of joints and muscles to move through their full range of motion.

Energy

The capacity to do work or the power derived from the utilization of physical or chemical resources, available in various forms such as kinetic, thermal, electrical, and chemical energy.

Calmness

A state of being free from agitation, excitement, or disturbance, often reflecting a serene mental state.

Tai Chi

A Chinese martial art practiced for both its defense training aspects and its health benefits, emphasizing fluid movement and mental calmness.