bfin participation check 1

Which of the following is NOT a reason for the time value of money?

 

Inflation

 

Risk Aversion

 

Impatience

 

SEC Regulation

SEC Regulation

To go from future values to present values, we should discount.

True

False

True

Alex just deposited $500 into a bank paying 5% interest, and Blake has deposited $1,000 into a bank paying 6% interest. Which of the following is true?

 

Alex will always have more money than Blake

 

Blake will always have more money than Alex

 

For a while Alex will have more money, but eventually Blake will have more money

 

For a while Blake will have more money, but eventually Alex will have more money

 

None of the Above

Blake will always have more money than Alex

Future value is:

 

How much a future cash flow is worth today

 

How much a cash flow today will be worth in the future

 

The amount of interest we expect to earn by investing today

 

The conversion rate between money today and money tomorrow

 

None of the Above

How much a cash flow today will be worth in the future

Fill in the Blank:

The fundamental theory of finance says that "a dollar today is worth ______ a dollar tomorrow."

 

more than

 

less than

 

the same as

 

exactly twice as much as

 

exactly half as much as

more than