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The Time Value of Money Quiz

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Why would someone prefer to receive $100 today instead of one year from today?

Because they would rather have $105 a year from now

Because they are indifferent to receiving the money today or one year from now

Because they can save the money and earn interest on it

Because they can spend the money now and get immediate satisfaction (correct)

What is the time value of money?

The value at which you are indifferent to receiving money today or one year from now (correct)

The value of money that increases over time

The value of money that decreases over time

The value of money that remains constant over time

If someone is offered $100 today or $105 a year from now, which option would they most likely choose according to the text?

$110 a year from now

$100 today (correct)

$120 a year from now

$105 a year from now

What is one benefit of receiving money today instead of one year from now, even if someone decides to save the money?

<p>They can deposit the money in a bank and earn interest on it</p> Signup and view all the answers

What is the rational decision when offered $100 today or $105 a year from now?

<p>To choose $100 today</p> Signup and view all the answers

The Time Value of Money Quiz

Choose a study mode

Podcast

Questions and Answers

Why would someone prefer to receive $100 today instead of one year from today?

What is the time value of money?

If someone is offered $100 today or $105 a year from now, which option would they most likely choose according to the text?

What is one benefit of receiving money today instead of one year from now, even if someone decides to save the money?

What is the rational decision when offered $100 today or $105 a year from now?

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