Why Is the Rate of Return on a Risk Free

question 67

Multiple Choice

Why is the rate of return on a risk free asset considered to represent the "time value of money"?

• A) It represents the return for forgoing the use of our money without bearing risk.
• B) It has an efficient risk premium when compared to other risk free investments.
• C) The yield of the risk free investment increases proportionally with time.
• D) The money from the return from your investment won't be created until the future.
• E) It represents the minimum amount of time necessary to have the asset become risk free.

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