The value of a financial asset is present value of the cash flows the asset is expected to generate in the future a. TRUE b. FALSE The time value of money is the opportunity cost of passing up dollar earning potential of a dollar today. a. TRUE b. FALSE Tim invested $10,000 in a mutual fund paying per year. John invested $5000 in the same fund. If both Tim and John keep their money invested for 6 years, Tim will end up with more than twice as much money as John due to compound interest. a. TRUE b. FALSE Because most preferred stocks are perpetuities, their value can be determined by dividing the annual dividend by an investors required return. a, TRUE b. FALSE If a bond is selling below its face value, then its yield to maturity must be less than the bond's coupon rate. a. TRUE b. FALSE