Which of the Following Statements About the Time Value of Money

question 30

Multiple Choice

Which of the following statements about the time value of money is true?

• A) The value of a dollar invested at a positive interest rate decreases over time.
• B) The further in the future you receive a dollar, the less it is worth today.
• C) A dollar in hand today is worth less than a dollar to be received in the future.
• D) The higher the rate of interest, the more likely an investor will elect to consume at present and forgo invest his funds.

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Definitions:

Inconsistency

The state of being inconsistent or not staying the same across different situations or over time.

Consistency

The characteristic of being reliable or uniform over a period of time, often referred to in the context of behavior, attitudes, or performance.

Emotional Instability

A trait characterized by rapid and intense emotional changes, often part of personality disorders.

Situationists

Advocates of the theory that behavior is determined more by situations and environmental factors than by innate traits.