Which of the Following Statements Is Correct

question 99

Multiple Choice

Which of the following statements is correct?

• A) $100 to be received in the future is worth more than that today since it could be invested and earn interest.
• B) $100 to be received in the future is worth less than that today since it could be invested and earn interest.
• C) The Rule of 72 calculates the compounded return on investments.
• D) Discounting is finding the future value of an original investment.

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Definitions:

Prospectus

A document that companies issue to potential investors, detailing the financial performance and risks involved in an investment offering.

Securities

Financial instruments that represent an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.

Net Worth

The total value of all assets owned by an individual or entity minus any liabilities or debts, representing the owner's equity in those assets.

Insider Trading

The illegal or legal trading of a public company's stock or other securities by individuals with access to nonpublic information about the company.