If interest rates rise, the present value of any future earnings is bound to:
A)Suffer from inflation
B)Increase in risk
C)Rise
D)Fall

Name: If interest rates rise, the present value of any future earnings is bound to: A)Suffer from inflation B)Increase in risk C)Rise D)Fall
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Question

Quizplus · Accepted Answer

When interest rates rise, the present value of future earnings falls because the discount rate used to calculate present value increases, making future earnings less valuable in today's terms.

If Interest Rates Rise, the Present Value of Any Future