If the Risk-Free Rate of Interest (R_f)is 5%, Then You

question 25

Multiple Choice

If the risk-free rate of interest (r_f) is 5%, then you should be indifferent between receiving $300 today or

• A)$315.00 in one year.
• B)$350.00 in one year.
• C)$285.00 in one year.
• D)none of the above.

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Definitions:

Profitable New Products

Goods or services newly introduced to the market that generate earnings exceeding their cost of production and marketing.

New Venture Creation

The process of designing, launching, and running a new business or startup.

Market Niche

A specialized segment of the market for a particular kind of product or service, characterized by specific customer needs and preferences that the business aims to fulfill.

First-Mover Advantage

Comes from being first to exploit a niche or enter a market.