Discussion
The time value of money means that a rupee received in a year's time is worth
Answer: A
Correct answer: less than a rupee today
A rupee today can be invested and will be worth more than a rupee in a year, so a rupee promised for next year must be worth less now. This holds even with no inflation at all, since the opportunity to earn a return exists regardless - inflation reduces the real value further but is not the cause.
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