Question
Which of the following instruments do not contain Zero
Risk?Solution
The features of Zero Risk are: (i) It does not have any uncertainty with it (like in case of bonds as interest is known) (ii) There is no variation in net cash flow, (like in case of term deposits) (iii) Return on such investment would be lower (like in Govt bonds)
In finance terminology the “Time value of money” signifies that:
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