The price of an asset moves in the same direction of a change in its discount rate.

Name: The price of an asset moves in the same direction of a change in its discount rate.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The price of an asset typically moves in the opposite direction of a change in its discount rate; as the discount rate increases, the present value of future cash flows decreases, leading to a decrease in the asset's price, and vice versa.

The Price of an Asset Moves in the Same Direction