Which of the Following Is TRUE About Perpetuities

question 5

Multiple Choice

Which of the following is TRUE about perpetuities?

• A)All else equal,the value of a perpetuity is higher when the periodic cash flow is lower.
• B)All else equal,the value of a perpetuity is higher when the interest rate is higher.
• C)If two perpetuities have the same present value and the same interest rate,they must have the same cash flows.
• D)All else equal,the value of a perpetuity is lower when the interest rate is lower.
• E)If two perpetuities have the same cash flows,they must have the same present value.

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Definitions:

Olfactory Receptors

Specialized nerve cells located in the nasal cavity that are responsible for detecting odors and initiating the sense of smell.

Perceptual Hypothesis

A proposal predicting how stimuli are organized and interpreted by the brain to form perceptions.

Distal Stimuli

Objects and events in the external world that provide the basis for sensory input.

Proximal Stimuli

The patterns of stimuli from objects and events that actually reach your senses like the light hitting the retina or sound waves hitting the eardrum.