The Appropriate Discount Rate That Analysts Use in Computing the Present

question 18

Multiple Choice

The appropriate discount rate that analysts use in computing the present value of future cash flows is composed of a risk factor reflecting the riskiness of the project.Thus,

• A)the greater a projects risk,the higher the discount rate.
• B)the Federal government has the lowest probability of default,so government bodies usually have the lowest risk premiums.
• C)a different discount rate would be used to invest a company's funds in a high-risk research and development project rather than low-risk bonds.
• D)all of the above.

Identify and describe the three main approaches utilized in applied social psychology.

Comprehend the significance of personal values within the context of applied social psychology.

Understand what is meant by level of analysis in social psychology and identify the different levels at which interventions may be directed.

Identify and describe the major roles of an applied social psychologist.

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Definitions:

Employment

The condition of having a paid job; the total number of people currently employed in the economy.

Interest Rate Effect

The impact that changes in the interest rate have on consumer spending and investment due to the cost of borrowing money.

Real Wealth Effect

The change in consumption levels caused by a change in purchasing power, often due to inflation or deflation.

Aggregate Demand Curve

The Aggregate Demand Curve represents the total quantity of all goods and services demanded by the economy at different price levels.