Suppose the Interest Rate Is 5 Percent

question 151

Multiple Choice

Suppose the interest rate is 5 percent.Consider three payment options:
1) $500 today.
2) $520 one year from today.
3) $550 two years from today.
Which of the following is correct?

• A)1 has the lowest present value and 3 has the highest.
• B)2 has the lowest present value and 1 has the highest.
• C)3 has the lowest present value and 2 has the highest.
• D)None of the above is correct.

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Definitions:

Genetic Female

Refers to individuals whose chromosomal and physiological characteristics are classified as female at birth.

Genetic Male

An individual whose chromosomes are typically characterized by the presence of one X and one Y chromosome, determining the male sex in most human beings.

Testosterone

A steroid hormone that plays a key role in the development of male reproductive tissues, as well as promoting secondary sexual characteristics such as increased muscle and bone mass.

Estrogen

Estrogen is a group of steroid hormones that play a critical role in the development and functioning of female reproductive tissues, as well as in the regulation of the menstrual cycle and reproductive system.