finance

Interest rates affect corporate profits and security prices. Based on your understanding of the relationship between interest rates and corporate profits and security prices, identify which of the following statements is true and which is false. To further examine the relationship between interest rates and the price of financial assets, consider the effect of a change in an investor's required return, or opportunity cost, on the price of a financial asset. Five years ago, Alejandro purchased a perpetuity that agrees to pay him and his heirs $300 per month forever. At the time of purchase, Alejandro was expecting to earn an annual return of 7.00%, but in the intervening years, the economy and the available investment alternatives have changed In today's market, it is now reasonable to anticipate an annual return of 4.25%. By how much would you expect the value of Alejandro's perpetuity to change from when he purchased it until today? $84, 705 $2, 773 $33, 276 $51, 429