The price of an asset should: A) exactly equal the total present value of all of the asset's future payments. B) exactly equal the total future value of all of the asset's future payments. C) approximately equal X(1 + i)^t,where X is the value of the asset,i is the interest rate,and t is the number of years. D) exactly equal the total present and future value of all of the asset's future payments.

Question

Quizplus · Accepted Answer

According to the concept of present value, the price of an asset should exactly equal the total present value of all of the asset's future payments. This is because the present value represents the current value of all future cash flows that an asset is expected to generate discounted at an appropriate interest rate. Therefore, choice A is the best answer.

The Price of an Asset Should