Which One of These Statements Related to the Time Value

question 91

Multiple Choice

Which one of these statements related to the time value of money is correct? Assume a positive rate of interest.

• A)A dollar increases in value the further into the future it is received.
• B)The future value of an invested dollar is inversely related to the rate of interest.
• C)The present value of a dollar to be received in one year is directly related to the interest rate.
• D)A dollar received today is more valuable than a dollar received next month.
• E)A dollar invested today will increase in value in a linear manner if interest earned is reinvested.

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Definitions:

Observable Behavior

Actions or reactions of an organism, typically in response to external stimuli, that can be seen and measured directly.

Mental Processes

Internal cognitive functions that are involved in perceiving, thinking, understanding, and deciding.

Wilhelm Wundt

Wilhelm Wundt, often regarded as the father of modern psychology, was a German psychologist who established the first psychological laboratory in Leipzig, Germany, where he focused on the study of consciousness through introspection.

Mental Processes

Internal cognitive functions that include thinking, perceiving, decision-making, and remembering, which underlie behavior.