Consider a company with a Reddington Immune cash flow stream of assets and liabilities. The asset payments all occur before the liability payments. What can you say about the present value of the entire cash flow stream if the interest rate increases from its current rate? a. We cannot say anything about the sign of the new present value. b. The new present value is negative. c. The new present value is positive. d. The new present value is zero.
Consider a company with a Reddington Immune cash flow stream of assets and liabilities. The asset payments all occur before the liability payments. What can you say about the present value of the entire cash flow stream if the interest rate increases from its current rate? a. We cannot say anything about the sign of the new present value. b. The new present value is negative. c. The new present value is positive. d. The new present value is zero.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Consider a company with a Reddington Immune cash flow stream of assets and liabilities. The asset payments all occur before the liability payments. What can you say about the
a. We cannot say anything about the sign of the new present value.
b. The new present value is negative.
c. The new present value is positive.
d. The new present value is zero.
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