- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 2. Time Value of Money in Finance
- Subject 2. Fixed Income Instruments and the Time Value of Money
CFA Practice Question
You expect to receive annual payments of $1,000 per year forever. If these payments can be invested at a rate of 8% per year, what is the present value of this perpetuity?
A. infinite
B. $12,500.00
C. $925.93
Explanation: PV = 1000/0.08
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