All Else Equal, the Future Value of a Lump-Sum Amount

question 48

Multiple Choice

All else equal, the future value of a lump-sum amount invested today will increase if the

• A)interest rate that is earned is lowered.
• B)number of compounding periods is increased.
• C)investment time period is shortened.
• D)amount initially invested is lowered.
• E)Two or more of the above answers are correct.

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Definitions:

Dummy Variables

Variables created to assign numerical values to categorical data, often used in regression analysis to include qualitative factors as independent variables.

Qualitative Variables

Variables that categorize or describe attribute characteristics without a natural numerical order or ranking.

Regression Model

A mathematical model that describes the relationship between a dependent variable and one or more independent variables.

Multiple Regression

A statistical technique used to model and analyze the relationship between a dependent variable and two or more independent variables.