- CFA Exams
- CFA Exam: Level I 2021
- Study Session 2. Quantitative Methods (1)
- Reading 6. The Time Value of Money
- Subject 1. The Time Value of Money and Interest Rates

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**CFA Practice Question**

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

Correct Answer: I, II and III

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**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? |