Multiple choice

1. Foregoing the earning potential of a dollar today is referred to as the:               

a.     time value of money.

b.     opportunity cost concept.

c.     risk/return tradeoff.

d.     creation of wealth.

2. Difficulty in finding profitable projects is due to:                         

a.     social responsibility.

b.     competitive markets.

c.     ethical dilemmas.

d.     opportunity costs.

3. Corporations receive money from investors with:                         

a.     initial public offerings.

b.     seasoned new issues.

c.     primary market transactions.

d.     a and b.

e.     all of the above.

4. 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.