The Duration of a Perpetuity with a Yield of 8

question 12

Multiple Choice

The duration of a perpetuity with a yield of 8% is

• A) 13.50 years.
• B) 12.11 years.
• C) 6.66 years.
• D) Cannot be determined

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Definitions:

Wage Decrease

A reduction in the hourly or salaried compensation paid to workers.

Utility Maximizing

The economic principle that individuals and firms strive to achieve the highest satisfaction or benefit from their resources and choices.

Industry Demand Curve

A graphical representation showing the quantity of a product that consumers in an industry are willing and able to purchase at each price over a period of time.

Labor Demand Curves

Graphs showing the relationship between the wage rate and the quantity of labor that employers are willing to hire at that rate.