The Present Value of a Future Payment Decreases If The

question 36

Multiple Choice

The present value of a future payment decreases if the:

• A)period between the present and the future increases.
• B)future payment increases.
• C)interest rate decreases.
• D)stock market rises.

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Definitions:

Dividend Yield

The annual dividend payment expressed as a percent of the stock price.

Index Model

A financial model that relates a stock's returns to the returns of a broader market index, used to estimate the stock's beta and expected returns.

Standard Deviation

A measure of the dispersion or variability of a set of values, widely used in finance to assess the risk associated with a particular investment.

Index Model

A statistical model used to predict stock prices by relating the returns of each stock to the returns of an overall market index.