question archive In 2 years you are to receive $10 and $15 in dividends
In 2 years you are to receive $10 and $15 in dividends
Subject:FinancePrice:2.86 Bought3
In 2 years you are to receive $10 and $15 in dividends. If the interest rate were to suddenly decrease, the present value of that future amount to you would
A) Remain unchanged B) Rise C) The correct answer cannot be determined without more information D) Rise and then fall E) Fall
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Interest rates and Future values are directly proportianate.
An increase in interest rates, will increase the Future Value, while a decrease in interest rates will decrease the future value.
Hence the correct answer is Option e) Fall
