Which of the following will NOT cause an increase in the present value of a sequence of payments?
A)a reduction in the current interest rate
B)a reduction in expected future interest rates
C)an increase in a future expected payment
D)none of the above

Question

Quizplus · Accepted Answer

None of the options will cause a decrease in the present value of a sequence of payments. Option A and B will actually cause an increase in present value as they increase the discount rate used to calculate the present value. Option C will also increase present value as it is an increase in the value of one of the payments.

Which of the Following Will NOT Cause an Increase in the Present