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An Asset That Earns a Fixed Sum of Money Each

Question 34

Multiple Choice

An asset that earns a fixed sum of money each year for its owner will


A) provide the same rate of return regardless of its cost.
B) provide its owner with a capitalized value equal to its annual payment.
C) have its present value capitalized each time the annual payment is received.
D) yield a lower rate of return when its price declines.
E) decline in price when the market rate of interest rises.

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