If the Interest Rate Is 19% and Will Remain 19

question 15

Multiple Choice

If the interest rate is 19% and will remain 19% forever, how much would a rational investor be willing to pay for an asset that will pay him 2,380 dollars 1 year from now, 1,416 dollars 2 years from now, and nothing at any other time?

• A)2,000 dollars
• B)3,000 dollars
• C)15,789.47 dollars
• D)60,000 dollars
• E)4,000 dollars

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Definitions:

Healthy Competition

The idea that competition can promote innovation, efficiency, and improvement when it is conducted in a fair and positive manner.

Conflict Theorists

are scholars who believe that society is in a state of perpetual conflict due to competition for limited resources, contributing to social inequality.

Stability

The state or quality of being resistant to change, especially sudden change or deterioration, maintaining equilibrium or remaining unchanged.

Conservative Reaction

A response aiming to preserve traditional structures, values, and practices in the face of perceived changes or threats to social, cultural, or political norms.