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A High School Teacher Is Giving a Lecture on Sexually

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A high school teacher is giving a lecture on sexually transmitted diseases to a class of seniors when one of them stands up and says "I'm safe with my boyfriend.He uses condoms." Which of the following responses of the teacher is most likely to be misleading?


Definitions:

Discount Rate

This interest rate is used in the framework of discounted cash flow analysis to determine the present worth of cash flows anticipated in times ahead.

Simple Rate of Return

A financial metric that measures the efficiency of an investment as the annual income divided by the initial investment cost.

Time Value of Money

The principle that a sum of money is worth more now than the same sum in the future due to its potential earning capacity.

Payback Method

A method of investment appraisal that calculates the time required for the cash inflows from a project to repay its initial investment cost.

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