Consider the Following Timeline: If the Current Market Rate

question 28

Multiple Choice

Consider the following timeline: If the current market rate of interest is 12%, then the value of the cash flows in year 0 and year 2 as of year 1 is closest to:

• A)$257.29
• B)-$78.71
• C)$1.29
• D)$78.71

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Definitions:

Dichotomous Thinking

A cognitive distortion involving viewing things in black and white categories, without recognizing any middle ground.

Rational Grounding

A cognitive behavioral technique that involves using reason and rational thinking to challenge and overcome irrational beliefs and fears.

Self-Talk

The internal dialogue that consists of the thoughts and beliefs an individual has about themselves and their experiences.

Irrational Belief Systems

Deeply held but unreasonable convictions or assumptions that can lead to emotional and behavioral issues.