If the Risk-Free Rate of Interest (Rf)is 6%,then You Should

question 35

Multiple Choice

If the risk-free rate of interest (rf) is 6%,then you should be indifferent between receiving $250 in one year or

• A)$235.85 today.
• B)$250.00 today.
• C)$265.00 today.
• D)None of the above

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Definitions:

AVERAGEIF

An Excel function that calculates the average of all numbers in a range that meet specified criteria.

Financial Functions

Specific mathematical formulas used in spreadsheets or financial software to perform calculations related to finance, such as interest rates, payments, and investment returns.

FV

Future Value, a finance function that calculates the future value of an investment based on a constant interest rate and fixed payments over time.

PMT

A financial function that calculates the payment for a loan based on constant payments and a constant interest rate.