Which of the Following Is True About Perpetuities

question 5

Multiple Choice

Which of the following is true about perpetuities?

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

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Definitions:

Pituitary Gland

A small, pea-sized gland located at the base of the brain, crucial for controlling growth, metabolism, and the activity of other glands.

Adrenal Gland

An organ located above the kidneys that produces hormones such as adrenaline and cortisol, which regulate stress response.

Thyroid Gland

An endocrine gland in the neck that produces hormones primarily responsible for regulating metabolism and energy use in the body.

General Adaptive Syndrome

A three-stage response (alarm, resistance, exhaustion) that the body goes through when exposed to prolonged stress, as proposed by Hans Selye.