If an investor had a choice of receiving $1,000 today or $1,000 in five years,which would the typical investor prefer?
A)$1,000 in five years: is better to receive money later rather than sooner.
B)$1,000 today: it will be worth more than $1,000 received in five years.
C)$1,000 in five years: it will be worth more than $1,000 received today.
D)Investors would be indifferent to when they would receive the $1,000.
E)None of the above.

Question

Quizplus · Accepted Answer

The typical investor would prefer to receive $1,000 today because the value of money decreases over time due to inflation. In five years, the $1,000 will be worth less than it is today, so receiving it now is more valuable.

If an Investor Had a Choice of Receiving $1,000 Today