There are three options of investment: If you invest 1000 now, you will receive 375 each...
There are three options of investment: If you invest 1000 now, you will receive 375 each at the end of next three years. If you invest 1000 now, you will receive 1080 at the end of 1st year. If you invest 1000 now, you will receive 1100 at the end of 2nd year. Risk-free interest rate is assumed to be 5%.
- Would you invest any of them? Why?
- Which one would you pick? Why?
Homework Answers
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There are three options of investment: If you invest 1000 now,
you will receive 375 each...
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You are considering two investment options. In option A, you have to invest RM6000 now and...
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You are considering two
investment options. In option A, you have to invest $6000 now and
$1 000
You are considering two investment options. In option A, you have to invest $6,000 now and S1,000 three years from now. In option B, you have to invest $3,400 now, $1,800 a year from now, and $1,100 three years from now. In both options, you will receive four annual payments of $2,300 each. (You will get the first payment a year from...
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You are considering two investment options. In option A, you have to invest RM4000 now and RM1000 three years from now, In option B, you have to invest RM1500 now, RM1500 a year from now, and RM1000 three years from now. In both options, you will receive four annual payments of RM4000 each. (You will get the first payment a year from now.) Which of these options would you choose based on (a) the conventional payback criterion, and (b) the...
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