As the interest rate rises,the present value of a given perpetual stream of income
A) increases.
B) decreases.
C) does not change.
D) approaches infinity.

Name: As the interest rate rises,the present value of a given perpetual stream of income A) increases. B) decreases. C) does not change. D) approaches infinity.
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Question

Quizplus · Accepted Answer

As the interest rate rises, the value of future cash flows decreases in today's dollars. Therefore, the present value of a given perpetual stream of income will decrease.

As the Interest Rate Rises,the Present Value of a Given