Suppose a Security with a Risk-Free Cash Flow of $1000

question 80

Multiple Choice

Suppose a security with a risk-free cash flow of $1000 in one year trades for $909 today.If there are no arbitrage opportunities,then the current risk-free interest rate is closest to:

• A)8%
• B)10%
• C)11%
• D)12%

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Definitions:

Satisfying Needs

The process of fulfilling basic and psychological desires or requirements of individuals or communities.

Consumer Behaviour

Researching the behaviors of individuals, groups, or corporations in how they identify, secure, use, and eliminate offerings such as products, services, experiences, or ideas to address their necessities, and examining the impact of these behaviors on consumers and societal structures.

Purchase

The process of purchasing products or services.

Dispose

The act of getting rid of something, typically something that is no longer useful or desired.