Which of the Following Statements Is Incorrect with Respect to Time

question 97

Multiple Choice

Which of the following statements is incorrect with respect to time lines?

• A) A helpful tool for organizing our analysis is the time line.
• B) Cash flows we receive are called inflows are denoted with a positive number.
• C) Cash flows we pay out are called outflows are designated with a negative number.
• D) Interest rates are not included on our time lines.

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Definitions:

Realized Gains

Profits earned from the sale of assets or investments when they are actually sold, as opposed to when they increase in value on paper.

Amortized Cost

The initial measurement of a financial asset or liability, adjusted for repayments of principal, accumulation of interest, and any loss in value.

Interest Income

Interest income is the revenue earned from deposit accounts or investments through the lending of money or the use of capital.