A Student and a Professor Each Choose a Number Between $\frac { 1 } { 81 }$

question 72

Multiple Choice

A student and a professor each choose a number between 1 and 9 (1 and 9 are both possible choices) . What is the probability that the two choose the same number?

• A) \(\frac { 1 } { 81 }\)
• B) \(\frac { 1 } { 9 }\)
• C) \(\frac { 2 } { 81 }\)
• D) \(\frac { 2 } { 9 }\)

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Definitions:

Internal Rate of Return

The discount rate at which the net present value of all the cash flows (both positive and negative) from a project or investment equals zero.

Multiple IRRs

The situation where a project has more than one internal rate of return, occurring due to unconventional cash flows.

Reinvestment Assumption

The theory that cash flows will be reinvested at a constant rate, often used in financial modeling.

Cost of Capital

The rate of return that a business must achieve in order to generate value, representing the opportunity cost of investing capital in a specific business rather than in an alternative venture.