Suppose You Have $1000 Today and the Risk-Free Rate of Interest

question 39

Multiple Choice

Suppose you have $1000 today and the risk-free rate of interest (rf) is 3.5%.The equivalent value in one year is closest to:

• A)$965.00.
• B)$966.18.
• C)$1000.00.
• D)$1035.00.

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Definitions:

Free Will

The concept that human beings have the ability to make choices that are not predetermined by external circumstances or internal conditions.

Involuntary Reaction

A response to a stimulus that occurs automatically without conscious intent or control.

Unrelated Stimulus

A stimulus that has no connection or relevance to the task at hand or to another specified stimulus.

Reinforcement

A concept in behaviorism that increases the likelihood of a behavior being repeated through positive or negative stimuli.