You Are Given the Choice Between Receiving $100,000 Today or $100,000

question 17

Multiple Choice

You are given the choice between receiving $100,000 today or $100,000 in one year.Which of the following statements is accurate?

• A)You would prefer to receive $100,000 today,as you could invest the money and in one year have much more than the original $100,000.
• B)You would prefer to receive $100,000 today,as the present value of receiving $100,000 in one year is much less than $100,000.
• C)You would prefer to receive $100,000 today due to the time value of money.
• D)All of the above statements are accurate.
• E)None of the above statements are accurate.

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Definitions:

Goods In Bailment

Purchased goods that are in some kind of storage under the control of a third party, such as a warehouseman.

Storage

The action or method of storing goods, data, or information for future use.

Physical Possession

The actual holding or control of property, as opposed to constructive possession which is the legal right to control.

Insurable Interest

The legitimate interest or stake a policyholder must have in the subject matter of the insurance policy, such that they would suffer financial loss or damage from its harm or destruction.