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Which of the following investments that pay will $10,500 in 13 years will have a lower price today? O The security that earns an interest
Which of the following investments that pay will $10,500 in 13 years will have a lower price today? O The security that earns an interest rate of 14.50%. O The security that earns an interest rate of 21.75%. 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 13.80%. 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 four years O An investment that matures in three years Which of the following is true about present value calculations? O Other things remaining equal, the present value of a future cash flow decreases if the investment time period increases. O Other things remaining equal, the present value of a future cash flow increases if the investment time period increases
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