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Attempts: 2.5 Keep the Highest: 2.5/10 3. Present value Finding a present value is the reverse of finding a future value. is the process of

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Attempts: 2.5 Keep the Highest: 2.5/10 3. Present value Finding a present value is the reverse of finding a future value. is the process of calculating the present value of a cash flow or a series of cash flows to be received in the future.. Which of the following investments that pay will $12,000 in 6 years will have a lower price today? The security that earns an interest rate of 8.25% O The security that earns an interest rate of 5.50%. Eric wants to invest in government securities that promise to pay $1,000 at maturity. The opportunity cost interest rate) of holding the security is 9.60%. Assuming that both investments have equal risk and Eric's investment time horizon is flexible, which of the following investment options will exhibit the lower price? O An investment that matures in six years O An investment that matures in seven years Which of the following is true about present value calculations? Other things remaining equal, the present value of a future cash flow increases if the discount rate increases. O other things remaining equal, the present value of a future cash flow decreases if the discount rate increases

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