Which of the Following Will Decrease the Present Value of an Annuity

question 9

Multiple Choice

Which of the following will decrease the present value of an annuity?

• A) The discount rate increases.
• B) The discount rate decreases.
• C) The number of periods the annuity is received increases.
• D) The final payment increases.

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Definitions:

Private Sector

The part of the economy that is run by individuals and companies for profit and is not under direct government control.

Public Sector

The portion of the economy composed of government services and enterprises, including federal, state, and local government bodies.

Profit and Loss

A financial statement that summarizes the revenues, costs, and expenses incurred during a specific period of time, usually a fiscal quarter or year, to show the net profit or loss of a business.

Regulatory Capture

A situation where regulatory agencies are dominated by the industries they are charged with regulating, often leading to regulations that serve the interests of those industries.