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Basic Question 2 of 4
The time value of money underlies ______.
II. discount rates and opportunity costs
III. inflation and risk
I. rates of return, interest rates, and required rates of return
II. discount rates and opportunity costs
III. inflation and risk
User Contributed Comments 9
| User | Comment |
|---|---|
| quanttrader | What does "underlies" mean? |
| Oarona | To form the basis of something. In this case I,II and III are all based on the time value of money. Hence the time value of money underlies them. |
| johntan1979 | underly = affect |
| carsonson | I think underlie = affected by |
| Stacerz02 | Will there be ?s on cfa where you select all of the above such as this one? Thanks. |
| Safiya921 | On the CFA exam you'll have 3 choices, one of which might ask for all of the 2 other answers. |
| marianne19 | see answer ofoarona |
| armynso | underlie = situated under/by |
| EEEEvia | will CFA exam indicate the question whether single or multiple answers? |
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Learning Outcome Statements
interpret interest rates as required rates of return, discount rates, or opportunity costs;
explain an interest rate as the sum of a real risk-free rate and premiums that compensate investors for bearing distinct types of risk;
CFA® 2024 Level I Curriculum, Volume 1, Module 1.