As the inflation rate increases, Blank______. Multiple choice question. the risk-free rate decreases the required rate of return decreases the risk-free rate increases the discount rate increases
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As the inflation rate increases, Blank______.
the risk-free rate decreases
the required rate of return decreases
the risk-free rate increases
the discount rate increases
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- Which of these will increase the present value of an amount to be received sometime in the future? Group of answer choices Increase in the discount rate. Increase in the time until the amount is received. Decrease in the interest rate Decrease in the future valuechoose 1 answerA market rate of discount for a single payment to be made in the future is a forward rate. Select one: True False
- TRUE / FALSE The discount rate used to discount the value of future dollars can generally be referred to as the investor’s required rate of return.The future value of a single sum A. is generally larger than the present sum. B. decreases as the number of periods increases. C. does not depend upon the number of periods. D. decreases as the interest rate increases.When do you think a person would opt to use the Payback Period Method instead of the Net Present Value or Internal Rate of Return? Give an example.
- Which of the following statements is/are false, all else the same? 1. Present values increase as the discount rate increases. II. Present values increase the further away in time the future value. III. Present values are always smaller than future values when both rand t are positive.Logan is conducting an economic evaluation under inflation using the then-current approach. If the inflation rate is j and the real time value of money rate is d, which of the following is the interest rate he should use for discounting the cash flows? a. j b. d c. j + d d. j + d + dj.If interest rates increase, the value of a fixed income contract decreases and vice versa. true? false?
- Q1) It is highly likely that the projected retirement income based on the replacement ratio method may not be sufficient to pay for retirement expenses if inflation rates are _________ wage growth rates.What happens to a future value is you increased the rate, r? What happens to a present value?Which one of the following statements is correct? Multiple Choice O Time and future values are inversely related, all else held constant. Interest rates and time are positively related, all else held constant. An increase in time increases the future value given a zero rate of interest. All else held constant. When the positive interest rate increases, the present value decreases. All else held constant.