Which of the Following Investments Has a Higher Present Value,assuming

question 93

Multiple Choice

Which of the following investments has a higher present value,assuming the same (strictly positive) interest rate applies to both investments?

• A)Investment X has a higher present value.
• B)Investment Y has a higher present value.
• C)Investment X and Investment Y have the same present value,since the total of the cash flows is the same for both.
• D)Investment Y has half the present value of Investment X.
• E)No comparison can be made - we need to know the interest rate to calculate the present value.

---

Definitions:

Signal Detection

A technique used to determine the ability to differentiate between information-bearing patterns and random patterns that distract from the information.

Sensory Adaptation

Sensory adaptation is a phenomenon in which the sensitivity to a stimulus decreases over time as an organism becomes accustomed to its presence.

Just-noticeable Difference

The minimum difference in stimulus intensity required to detect a difference between two stimuli.

Thalamus

A part of the brain that serves as a central relay station for sensory information, excluding smell.