What Is the Present Value (PV)of an Investment That Pays

question 95

Multiple Choice

What is the present value (PV) of an investment that pays $10,000 every year for four years if the interest rate is 7% APR,compounded quarterly?

• A)$33,730
• B)$33,872
• C)$38,680
• D)$40,000
• E)$30,516

---

Definitions:

Economic Risk

The possibility of loss caused by macroeconomic or market conditions, such as changes in interest rates or recessions.

Forward Rate

The agreed upon exchange rate for a currency transaction that will occur at a future date.

Spot Price

The current market price at which an asset can be bought or sold for immediate delivery.

Canadian Dollars

The currency of Canada, symbolized as CAD, and used throughout the country.