The Duration of a Perpetuity with a Yield of 10

question 8

Multiple Choice

The duration of a perpetuity with a yield of 10% is

• A)13.50 years.
• B)11 years.
• C)6.66 years.
• D)cannot be determined.
• E)none of the above.

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Definitions:

Consumption

The utilization of products and services by families.

Marginal Propensity

The ratio of the change in an economic variable, such as consumption or saving, to the change in another, typically income.

Disposable Income

The net financial position of households for spending and saving, after accounting for income taxes.

Consumption

Consumption encompasses the acquisition and use of goods and services by households to satisfy their needs and wants.