Suppose you received a US savings bond as a gift, and the bond pays $100 at maturity, which is ten years from now. What happens to the present value of this bond payment if the interest rate increases? A. Present value increases B. Present value is not affected C. Present value declines
Suppose you received a US savings bond as a gift, and the bond pays $100 at maturity, which is ten years from now. What happens to the present value of this bond payment if the interest rate increases? A. Present value increases B. Present value is not affected C. Present value declines
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Suppose you received a US savings bond as a gift, and the bond pays $100 at maturity, which is ten years from now. What happens to the present
A. |
Present value increases |
|
B. |
Present value is not affected |
|
C. |
Present value declines |
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