Consider an Investment That Pays $1000 Certain at the End

question 41

Multiple Choice

Consider an investment that pays $1000 certain at the end of each of the next four years.If the investment costs $3500 and has an NPV of $74.26,then the four-year risk-free interest rate is closest to:

• A)4.50%.
• B)4.58%.
• C)4.55%.
• D)4.53%.

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Definitions:

Equifinality

The principle that in open systems, the same end state can be reached from different initial conditions and by a variety of paths.

Same End

Achieving the same outcome or goal despite possibly using different means.

Output

The final product, result, or amount of something produced by a process, system, or activity.

Communication Flow

The movement and direction of information within an organization or between individuals, including how effectively information is shared.