Attempts: 2 Average: 2/4 2. Present value Finding a present value is the reverse of finding a future value. is the process of calculating the present value of a cash flow or a series of cash flows to be received in the future. Which of the following investments that pay will $10,000 in seven years will have a higher price today? O The security that earns an interest rate of 6.00%. The security that earns an interest rate of 4.00%. Eric wants to invest in government securities that promise to pay $1,000 at maturity. The opportunity cost (interest rate) of holding the security is 6.80%. Assuming that both investments have equal risk and Eric's investment time horizon is flexible, which of the following investment options will exhibit the lower price? O An investment that matures in five years O An investment that matures in four years Which of the following is true about present value calculations? O Other things remaining equal, the present value of a future cash flow increases if the discount rate increases 0 Other things remaining equal, the present value of a future cash flow decreases if the discount rate increases