Your Father Paid $10,000 (CF at T = 0)for an Investment

question 142

Multiple Choice

Your father paid $10,000 (CF at t = 0) for an investment that promises to pay $750 at the end of each of the next 5 years,then an additional lump sum payment of $10,000 at the end of the 5th year.What is the expected rate of return on this investment?

• A)6.77%
• B)7.13%
• C)7.50%
• D)7.88%
• E)8.27%

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Definitions:

Premiums

The additional amount paid for a commodity or service above its basic cost, often associated with insurance policies or enhanced product features.

Prospect's Participation

The involvement or engagement of a potential customer in the sales process, often through interaction or providing feedback.

Product Use

Refers to the manner in which a product is utilized by the consumer, often determining its effectiveness, functionality, and satisfaction derived from it.

Appeal to the Prospect's Senses

A marketing or sales strategy that focuses on engaging the potential customer’s sensory experiences to influence their purchasing decisions.