How Are Present Values Affected by Changes in Interest Rates

question 91

Multiple Choice

How are present values affected by changes in interest rates?

• A) The lower the interest rate, the larger the present value will be.
• B) The higher the interest rate, the larger the present value will be.
• C) Present values are not affected by changes in interest rates.
• D) One would need to know the future value in order to determine the impact.

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Definitions:

Manic-depressive Disorder

An old term for bipolar disorder, a mental health condition characterized by extreme mood swings.

Chemical Imbalance

A hypothetical concept suggesting that mental health conditions arise from an imbalance of chemicals in the brain.

Traditional Classification

A system of categorization based on longstanding and conventional criteria or principles.

Mental Disorders

A broad range of conditions affecting mental health, characterized by alterations in thinking, mood, or behavior associated with distress or impaired functioning.