Which One of the Following Statements Correctly Defines a Time

question 16

Multiple Choice

Which one of the following statements correctly defines a time value of money relationship?

• A) Time and future values are inversely related, all else held constant.
• B) Interest rates and time are positively related, all else held constant.
• C) An increase in a positive discount rate increases the present value. 
• D) An increase in time increases the future value given a zero rate of interest. 
• E) Time and present value are inversely related, all else held constant. 

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Definitions:

Utility Function

A mathematical representation that ranks an individual's or agent's preferences over sets of goods and services, yielding levels of satisfaction.

Income

Monetary returns generated consistently through work engagements or investment strategies.

Price

The figure set as the cost or value of a transaction for a product or service in the marketplace.

Apples

A common fruit cultivated worldwide, also used metaphorically to represent simple examples in economic models.