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

question 85

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)$244.00 in one year.
• E)$256.00 in one year.

---

Definitions:

Ability

The possession of the skills, talents, or competencies to perform a specific task or set of tasks.

Forethought

Pertains to the mental activity involving planning or thinking ahead before taking action.

Social Learning Theory

A theory that proposes individuals learn new behaviors and acquire new information through observing others in their social environment.

Anticipate

The act of expecting or predicting something to occur in the future.