If the Risk-Free Rate of Interest (R_f)is 6%,then You Should

question 29

Multiple Choice

If the risk-free rate of interest (r_f) is 6%,then you should be indifferent between receiving $250 today or

• A)$235.85 in one year.
• B)$250.00 in one year.
• C)$265.00 in one year.
• D)None of the above

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Definitions:

Validly Enacted Laws

Laws that have been properly passed and approved by the legislative process, and are therefore legally binding.

Just Law

A legal principle or legislation that is regarded as fair, morally right, and in accordance with ethical standards.

Equitable Remedy

A corrective action ordered by a court that involves doing or refraining from doing something, as opposed to paying damages, to address a legal wrong or a breach of contract.

Equity Courts

Courts that have jurisdiction over cases involving remedies other than monetary rewards, such as injunctions or specific performance, based on fairness.