when a dollar in the future is discounted to the present it is worth less because of the time value of money, but when a news item is discounted, it means that the market already knew about most of the news item.
What is value of money?
- Concurring to the budgetary guideline known as "time esteem of cash," a dollar's esteem nowadays is more prominent than its esteem within the future.
- This way of thinking is valid because money invested today could possibly develop to be worth more later on.
- The amount of products and services that money can buy is what determines its value.
- The range of prices determines what can be purchased.
- A higher price level results in less things being available for a given amount of money. At that point, it is contended that cash has depreciated.
Why is the worth of money important?
- A dollar that's accessible nowadays is worth more than a dollar that's guaranteed within the future, which is why the worldly esteem of cash (TVM) could be a vital concept for investors.
- The dollar that is available today can be invested to generate income or capital gains.
when a dollar in the future is discounted to the present it is worth less because of the time value of money, but when a news item is discounted, it means that the market already knew about most of the news item.
To know more about value of money, visit:
https://brainly.com/question/16469558
#SPJ4
