Which of the Following Is (Are) True

question 129

Multiple Choice

Which of the following is (are) true?

• A) Interest rates can be used to compare values of payments that will occur at different times.
• B) Choices concerning capital and natural resources do not involve the use of interest rates.
• C) The concept of present value cannot be applied to a series of future payments.
• D) A and B are true.

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Definitions:

Market Efficiency

Market efficiency refers to the extent to which market prices reflect all available, relevant information, making it impossible to consistently achieve higher returns on investment without taking additional risk.

Fair Insurance Policy

A policy that is considered equitable, offering terms and conditions that are reasonable and just for both the insurer and the insured, without exploiting any party.

Premium

An amount paid for an insurance policy, reflecting the cost of obtaining insurance coverage.

Expected Value

A calculated average of the possible outcomes of a variable, taking into account the likelihood of each outcome.