Value of Money

Define the term 'opportunity cost' in the context of time value of money.

• Opportunity cost is the profit gained from an investment.

• Opportunity cost is the interest rate used to discount future cash flows.

• The opportunity cost in the context of time value of money is the potential benefits that are foregone by choosing one investment or course of action over another.

• Opportunity cost is the total amount of money invested in a project.

What role does the interest rate play in time value of money calculations?

• The interest rate has no impact on time value of money calculations

• The interest rate is only relevant for short-term investments

• The interest rate is essential for discounting future cash flows or calculating the future value of an investment.

• The interest rate is fixed and does not change over time

How does inflation impact the time value of money?

• Inflation reduces the time value of money by decreasing the purchasing power of future cash flows.

• Inflation only impacts the time value of money for short-term investments.

• Inflation increases the time value of money by boosting the purchasing power of future cash flows.

• Inflation has no impact on the time value of money.

What is present value of money?

• Process of accumulated interest

• Cash value of the investment at some point in the future

• Interest compounded more often than once a year

• Current value of future cash flows discounted at the appropriate discount rate

What happens to the value of a dollar when prices go up? 

• The value goes up.

• The value doubles.

• They value goes down.

• The value does not change.

What is the meaning of the phrase 'time is money'?

• Time is a valuable resource, so it is better to do things as quickly as possible.

• Time can be exchanged for money at any bank.

• Time and money are unrelated concepts.

• Time is only important in financial transactions.

Which literary device is used in the phrase 'penny for your thoughts'?

• Metaphor

• Simile

• Idiom

• Hyperbole

In the context of literature, what does 'filthy lucre' refer to?

• Dirty coins

• Ill-gotten money

• Old banknotes

• Counterfeit currency

What is the main theme of the saying 'money can't buy happiness'?

• Wealth leads to sadness.

• Happiness is not dependent on material wealth.

• Money is the root of all evil.

• Happiness is expensive.

Identify the correct sentence:

• Money are important for survival.

• Money is important for survival.

• Money were important for survival.

• Money be important for survival.