If the Annual Market Rate of Interest Is 5%,an Asset

question 39

Multiple Choice

If the annual market rate of interest is 5%,an asset that promises to pay $100 after each of the next two years has a present value of

• A)$90.70.
• B)$95.24.
• C)$181.40.
• D)$185.94.
• E)$200.00.

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Definitions:

Licenses

Official permissions granted by an authority to an individual or organization to do something, especially to carry out a business or activity.

Tradable Emissions Permits

A market-based environmental policy instrument that allows companies to buy or sell government-granted allotments of pollution, encouraging the reduction of emissions in a cost-effective manner.

Licenses

Official permits or authorizations granted by a governing body, allowing an individual or company to carry out a particular activity or use a particular product.

Polluters

Entities, often companies or individuals, that release pollutants into the environment, causing harm or potential harm.