1. Which of the following statements is false with respect to the present value of a future amount?
a. The higher the discount rate, the lower the present value of a single sum for a given time period.
b. The lower the discount rate, the lower the present value of a single sum for a given time period.
c. none of the answers is correct.
d. The relation between present value and time is exponential.
e. The greater the time period, the lower the present value of a single sum for a given interest rate.
2. In order to sell the common stock of many major foreign companies in the United States in U.S. dollars, investment banks and other investment dealers buy foreign stocks and place them in special trusts to issue their own securities. These securities are called:
a. comparative advantage leads stocks.
b. arbitrage stocks.
c. American depository receipts.
d. none of the answers is correct.
e. foreign parity stocks.