If your broker tells you that a trust to which you are a beneficiary has changed and instead of getting $5000 per year starting next year you will be getting $6000 per year starting next year the present value to you has
A)fallen.
B)risen.
C)remained unchanged.
D)necessarily become more predictable.

Question

Quizplus · Accepted Answer

The present value to the beneficiary has increased since they will now receive $6000 per year instead of $5000 per year. The increase in the annual payment means that the future cash flows are worth more, therefore the present value has risen.

If Your Broker Tells You That a Trust to Which