Which of the Following Statements Is True

question 24

Multiple Choice

Which of the following statements is true?

• A) Present value calculations involve converting the initial amount into a future amount.
• B) The present value (PV) is often called the compounded value of future cash payments.
• C) The present value is calculated by using the discount factor.
• D) The future value of an investment is the reciprocal of its present value.

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Definitions:

Publicly Held

Describes a company whose shares are traded openly on stock exchanges and can be purchased by the general public.

Securities Act

A U.S. law enacted in 1933 that requires the disclosure of significant financial information by companies offering securities (stocks, bonds) for public sale.

Exempt

To be free or released from an obligation, rule, or requirement typically imposed on others.

Securities Exchange Act

A U.S. federal law enacted in 1934 that governs the trading of securities, such as stocks and bonds, to protect investors and maintain fair and orderly markets.