7,000
6,000
5,000
4,000
Present Value of $10,000 Payment
to Be Received in 10 Years
3,000
2,000
1,000
0
0
4
8 12 16 20 24 28 32
Discount Rate (Percent)
Select the three (3) correct answers:
A) There is an inverse relationship between the present value of the bond and its discount rate.
B) There is a direct relationship between the present value of the bond and its discount rate.
C) The larger the period and the higher the discount rate, the lower the present value.
D) The graph describes an upward sloping curve.
E) The graph describes a downward sloping curve.