Suppose the risk-free interest rate is 4.0%.
a. Having $200 today is equivalent to having what amount in one year?
b. Having $200 in one year is equivalent to having what amount today?
c. Which would you prefer, $200 today or $200 in one year?
Does your answer depend on when you need the money? Why or why not?
a. Having $200 today is equivalent to having what amount in one year?
Having $200 today is equivalent to having in one year.(Round to the nearest cent.)
$
b. Having $200 in one year is equivalent to having what amount today?
Having $200 in one year is equivalent to having today. (Round to the nearest cent.)
$
c. Which would you prefer, $200 today or $200 in one year?(Select the best choice below.)
A. $ 200 today
B. $200 in one year
Does your answer depend on when you need the money? Why or why not?(Select the best choice below.)
A. No, because if you didn't need it then the $200 can be invested and you could have more than $200 in one year.
B. Yes, because if you did need the money today it is more valuable than $200.
C. Yes, because if you didn't need it, it's not worth $200.
D. No, because if you did need it you could borrow the $200.
Click to select your answer(s).
TUTORIAL PREVIEW
Rate = | 4% |
Nper = | 1 |
File name: suppose the risk free rate.xlsx File type: docx PRICE: $4
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