You Are Expecting a Payment of 500,000PLN 3 Years from Now

question 245

Multiple Choice

You are expecting a payment of 500,000PLN 3 years from now. The risk-free rate of return is 4 percent in Canada and 2 percent in Poland. The inflation rate is 4 percent in Canada and 1 percent
In Poland. Currently, you can buy 380PLN for $100. How much will the payment 3 years from now
Be worth in dollars?

• A) $138,700
• B) $138,900
• C) $139,800
• D) $142,300
• E) $144,169

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Definitions:

Resource Market

A market where resources (such as labor, capital, and raw materials) that are used to produce goods and services are bought and sold.

Product Market

The marketplace where final goods or services are traded between sellers and buyers.

Business Risk

The potential for financial loss in operating a business, arising from factors such as changes in market demand, costs, competition, and regulatory environment.

Entrepreneurs

Individuals who start, organize, and manage new business ventures, taking on financial risks in the hope of profit.