One Way to Characterize the Difference Between Compounding and Discounting

question 17

Multiple Choice

One way to characterize the difference between compounding and discounting is to say that

• A)compounding involves the assumption that the interest rate is zero,whereas discounting does not involve that assumption.
• B)discounting involves the assumption that the interest rate is zero,whereas compounding does not involve that assumption.
• C)the process of compounding produces a future value,whereas the process of discounting produces a present value.
• D)the process of compounding produces a present value,whereas the process of discounting produces a future value.

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Definitions:

Learned Helplessness

Belief that one’s actions will not bring about desired outcomes, leading one to give up and quit trying.

Encounter

A meeting or interaction between individuals, which can range from casual or brief to significant.

Failure

Failure is the state or condition of not meeting a desirable or intended objective, often leading to a range of consequences.

Pursuing Goals

The act of setting objectives and making efforts to achieve them.