The Future Value of a Dollar ________ as the Interest

question 23

Multiple Choice

The future value of a dollar ________ as the interest rate increases and ________ the farther in the future an initial deposit isis the funds are to be received.

• A)decreases; decreases.
• B)decreases; increases.
• C)increases; increases.
• D)increases; decreases.

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Definitions:

Convertible Bonds

Bonds that can be converted into a predefined amount of the issuing company's equity at certain times during their life, usually at the discretion of the bondholder.

Conversion Price

In finance, the Conversion Price is the predetermined price at which convertible securities can be exchanged for common shares of the issuing company.

Option Contract

A financial derivative that gives the buyer the right, but not the obligation, to buy or sell an asset at a specified price on or before a specified date.

Exercise Price

The cost at which an options contract's owner has the right to purchase or sell the underlying asset.