The Present Value of $10 000 to Be Received in 10

question 20

Multiple Choice

The present value of $10 000 to be received in 10 years will __________ if the discount rate is increased.

• A)remain constant
• B)decrease
• C)increase
• D)either remain constant or increase
• E)either remain constant or decrease

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Definitions:

Bearish Signal

An indication in financial markets that the price of an asset is expected to decline.

Overweighting

Refers to the practice of allocating a larger percentage of a portfolio to a particular asset or sector than the benchmark or average portfolio.

Recent Performance

Refers to the latest outcomes or results of an investment's or financial instrument's activity over a short-term period.

Conventional Finance Theory

A framework in economics that explains the behavior of financial markets, including the dynamics of assets and securities pricing, investment portfolios, and market mechanisms.