A Perpetuity Pays $85 Per Year and Costs $950

question 20

Multiple Choice

A perpetuity pays $85 per year and costs $950.What is the rate of return?

• A) 8.95%
• B) 9.39%
• C) 9.86%
• D) 10.36%
• E) 10.88%

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Definitions:

Versailles Treaty

The treaty signed at the Versailles peace conference after World War Ⅰ, which established President Woodrow Wilson’s vision of an international regulating body, redrew parts of Europe and the Middle East, and assigned economically crippling war reparations to Germany, but failed to incorporate all of Wilson’s Fourteen Points.

Liberal Internationalism

A foreign policy doctrine that argues for the spread of democracy and open markets, often associated with Woodrow Wilson's presidency.

Federal Government

The national government of a federation, which holds the authority to govern issues that affect the entire country, distinct from state or local governments.

Early Twentieth Century

A period from 1900 to 1945 marked by rapid industrialization, significant technological advancements, and major global conflicts such as World War I and World War II.