Suppose the Current Price of Gold Is $600 Per Ounce

question 29

Multiple Choice

Suppose the current price of gold is $600 per ounce. The price of gold is expected to grow at 4% per year for the foreseeable future. If the appropriate discount rate is 10%, then the current value of gold per ounce is:

• A) Less than $600 per ounce
• B) $600 per ounce
• C) Greater than $600 per ounce
• D) Not enough information

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