Groups of 2 students.

KHOULE Aminata
Cyatwa Joanna

Write out your answers in a word doc (I do not need the Word doc yet…i.e. no requirement
to email me at this stage ….)
Keep answers short i.e. less than 3 lines per answer….
Questions:

HOMEWORK ONE

1. What are the main components of inflation?

There are three main causes of inflation: demand-pull inflation, cost-push inflation, and
built-in inflation.
https://www.investopedia.com/terms/i/inflation.asp

2. Explain the Time Value of Money.

The concept of the time value of money states that money received today is more valuable
than money received at a later date. In effect, a person who agrees to be paid at a later date
gives up the opportunity to invest that money now.

https://www.accountingtools.com/articles/the-time-value-of-money-concept.html

3. What is the Risk of an investment?

Investment risk can be defined as the probability of losses occurring relative to the expected
return on a particular investment.

https://economictimes.indiatimes.com/definition/investment-risk

4. What is FIAT money and give some examples?

Fiat money is essentially any currency that doesn’t have any intrinsic value like gold and
silver but is rather established as legal tender by government
regulation. Some examples are the euro, American dollar and the pound sterling.

https://corporatefinanceinstitute.com/resources/knowledge/economics/fiat-money-currency/
https://www.ig.com/en/glossary-trading-terms/fiat-currency-definition

5. What is the GOLD STANDARD and the historical significance?

The gold standard is a currency measurement system that uses gold as a way to set the
value of money. Since it was first into operation in Britain in 1821, it has had a great impact
on the economy throughout history as it has kept banks or governments from causing
inflation.
https://www.britannica.com/topic/gold-standard

6. What is your question on FINANCE / ECONOMICS for me?

Assuming a company wishes to distribute money to its shareholders, is it better to distribute

dividends or to repurchase shares?