When computing the present discounted value (pdv) of a future stream of labor income, an increase in the interest rate willGroup of answer choicesreduce the pdv.have no impact on pdv.depend on the time path of income.increase the pdv.

As the interest rate increases for any given period, the future value will

Ceterus Paribus, if we reduce the rate of discounting, the present value will:2 pointsFallRiseRemain sameNeed more information

If the nominal interest rate is zero, then the present discounted value of a sequence of future payments is: Group of answer choiceszero undefined equal to the last of the payments equal to the sum of all payments equal to the square of the sum of all payments

Given the future value, which of the following will contribute to a lower present value?Question 8Select one:a.Higher discount rateb.Fewer time periodsc.Less frequent discountingd.Lower discount factore.None of these is correc

If we use future value of cash flows rather than present value to decide whether to make an investment: a. we will make the same decision using either future value or present value. b. We will make a good decision, since the future value will always be higher if the discount rate is positive. c. we will make a bad decision, since the future value will always be lower if the discount rate is positive. d. we will make a bad decision, since the future value will always be higher if the discount rate is positive. e. There is not enough information given to answer the question.