Which of the Following Is True About Perpetuities

question 10

Multiple Choice

Which of the following is true about perpetuities?

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

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Definitions:

Cognitive Dissonance

A psychological phenomenon that occurs when a person holds contradictory beliefs, ideas, or values, leading to psychological stress or discomfort.

Selective Exposure

The process of allowing only a portion of the information revealed to be organized, interpreted, and permitted into awareness.

Benefits Important To The Prospect

Features or aspects of a product or service that are particularly valued or needed by a potential client or customer.

Unique Product Features

Specific characteristics of a product that set it apart from competitors' offerings in the market.