If the Interest Rate Is 6% and Will Remain 6

question 4

Multiple Choice

If the interest rate is 6% and will remain 6% forever, how much would a rational investor be willing to pay for an asset that will pay him 8,480 dollars 1 year from now, 1,123 dollars 2 years from now, and nothing at any other time?

• A)9,000 dollars
• B)63,000 dollars
• C)150,000 dollars
• D)8,000 dollars
• E)10,000 dollars

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Definitions:

More Than Two Groups

A situation in statistical analysis where comparisons are made among three or more distinct groups or categories.

Two Groups

A reference to experimental designs where subjects are divided into two groups for comparison.

Single Group

Involves analyzing or obtaining data from one specific group or category, often used in research studies for comparison or to measure change over time.

Simple Analysis

A straightforward approach to data analysis that focuses on basic statistical techniques and models without involving complex computations.