Investors prefer $1 today versus $1 in the future due to:
A)time value of money.
B)opportunity cost.
C)agency problems.
D)A and B.
E)all of the above.

Question

Quizplus · Accepted Answer

The time value of money refers to the concept that money is worth more today than it is in the future due to potential investment opportunities and inflation. Opportunity cost is the value of the next best alternative foregone in order to pursue a certain action. Both factors play a role in why investors prefer $1 today versus $1 in the future. Agency problems, while a potential concern for investors, are not directly related to the preference for present value over future value.

Investors Prefer $1 Today Versus $1 in the Future Due