The One-Year Discount Factor at an Interest Rate of 100

question 99

Multiple Choice

The one-year discount factor at an interest rate of 100% per year is:

• A) 1.5
• B) 0.5
• C) 0.25
• D) None of the above

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Definitions:

Absolute Purchasing Power Parity

A hypothesis positing that when there are no transportation or transaction expenses, the same products in various nations ought to be priced equally if priced in the same currency.

Exchange Rate

The worth of one currency in relation to another for conversion purposes, specifying the amount of one currency that can be exchanged for another.