Certified Financial Planner (CFP) Practice Exam · Question
Which of the following best describes the 'time value of money' concept?
The time value of money (TVM) is the concept that a sum of money is worth more now than the same sum will be at a future date due to its potential earning capac
Start free practice for Certified Financial Planner (CFP) Practice Exam
444 questions · no signup required · 40 free questions per day
Question: Which of the following best describes the 'time value of money' concept?
Answer options:
- The risk of an investment changing in value over time. ✅ The idea that money available today is worth more than the same amount in the future due to its potential earning capacity.
- The impact of inflation on the purchasing power of money over time.
- The cost of borrowing money over a certain period.
Correct answer: The idea that money available today is worth more than the same amount in the future due to its potential earning capacity.
Explanation: The time value of money (TVM) is the concept that a sum of money is worth more now than the same sum will be at a future date due to its potential earning capacity.
Start free practice for Certified Financial Planner (CFP) Practice Exam
444 questions · no signup required · 40 free questions per day
More about Certified Financial Planner (CFP) Practice Exam
More for Certified Financial Planner (CFP) Practice Exam candidates
Ready to practice?
Free, no signup required. Build a wrong-question list as you go.
Start Free Certified Financial Planner (CFP) Practice Exam Practice →Related courses
Other Canadian certifications candidates often prepare for alongside this one.