Which of the Following Statements Best Reflects the Concept of Present

question 129

Multiple Choice

Which of the following statements best reflects the concept of present value?

• A)"The savings bond I bought five years ago is now worth $1,000."
• B)"My $100 savings bond will be worth $200 in 10 years."
• C)"You owe me $500, due at the end of the year, but I will reduce your debt to $450 if you pay me now."
• D)"The $5,000 in my savings account is worth less today than five years ago because of inflation."

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Definitions:

Predictive Validity

The degree to which a test or measure predicts future performance or outcomes.

Predictive Validity

The extent to which a score on a scale or test predicts future performance on a related task or identifies a particular outcome.

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Numerical measures of a person's intelligence relative to that of others, based on standardized tests.