Steve Is Offered an Investment Where for Every $1

question 23

Multiple Choice

Steve is offered an investment where for every $1.00 invested today, he will receive $1.10 at the end of each of the next five years. Steve concludes that in five years he will have $1.10 for every $1.00 invested and that this investment will increase his personal value. What is Steve's major error in reasoning when making this decision?

• A) He ignores the fact that the costs and benefits of the investment are not stated in the same terms.
• B) He ignores the benefits of consuming the $1.00 today against the benefits of consuming the $1.00 five years from now.
• C) He fails to consider the costs of not consuming the $1.00 today.
• D) He considers that the value of the cash he may have in the future is the same as the value of cash he has today.

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Definitions:

Dual-Sex Principle

The concept that societies recognize and incorporate both masculine and feminine perspectives and roles, acknowledging the importance and balance of both genders in cultural and social practices.

Political And Religious Leaders

Individuals who hold positions of power and authority in political and religious institutions, guiding and influencing policies, beliefs, and practices.

Masculine and Feminine Side

Refers to the traditional qualities or attributes thought to be characteristic of men (masculine) and women (feminine), including behavioral, cultural, or psychological traits.

Agricultural Tribes

Indigenous groups whose economy and culture were heavily centered around farming and cultivation practices.