The Longer the Time Period,the Higher the Present Value Interest

question 66

True/False

The longer the time period,the higher the present value interest factor,other things being equal.

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Definitions:

Maturity Risk

is the risk associated with the time until a financial instrument reaches its maturity, affecting interest rate exposure and investment valuation.

Time To Maturity

The duration remaining until the final payment date of a financial instrument, such as a bond, at which point the principal is supposed to be paid back to investors.

Yield Differential

The difference in returns between two different investments, often used to compare the potential earnings from bonds of different countries.

Recessionary Periods

Recessionary periods are times of economic decline when there is a decrease in the gross domestic product (GDP), employment, and spending for two consecutive quarters or more.