You Are Expecting to Receive $750 at Some Time in the Future.Which

question 72

Multiple Choice

You are expecting to receive $750 at some time in the future.Which of the following would unambiguously decrease the present value of this future payment?

• A)Interest rates rise and you get the payment sooner.
• B)Interest rates rise and you have to wait longer for the payment.
• C)Interest rates fall and you get the payment sooner.
• D)Interest rates fall and you have to wait longer to get the payment.

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Definitions:

Concrete-operations Stage

The stage in Piaget's theory of cognitive development, from ages 7 to 11, when children gain a better understanding of mental operations and can think logically about concrete events.

Systematic Strategy

An organized, methodical plan of action designed to achieve a specific goal or solve a particular problem.

Principle of Conservation

A concept in developmental psychology that a child becomes capable of understanding that certain properties of objects, such as volume or mass, remain the same despite changes in form or appearance.

Abstract Thought

The ability to think about concepts, ideas, and principles that are not physically present or directly sensed, involving complex cognitive processing.