In: Finance
Generally, from an investor’s point-of-view, time zero is synonymous with
A : the end of an investment period.
B : a negative cash flow.
C : the date at which interest earned has completely depleted.
D : a positive cash flow.
Solution:
Time zero is the time when an investor invests in the financial assets and negative cash flow is generated. Suppose an investor purchases a share today then it can be said that the investor will have a negative cash flow today at time zero.
Hence the correct option is B ) a negative cash flow
Option A is incorrect as time zero is the start of an investment period
Option C is incorrect as time zero does not say about that
Option D is the opposite of B hence incorrect