If the Interest Rate Is 15% and Will Remain 15

question 8

Multiple Choice

If the interest rate is 15% and will remain 15% forever, how much would a rational investor be willing to pay for an asset that will pay him 3,450 dollars 1 year from now, 1,322 dollars 2 years from now, and nothing at any other time?

• A)4,000 dollars
• B)26,666.67 dollars
• C)64,000 dollars
• D)3,000 dollars
• E)5,000 dollars

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Definitions:

Blood-Clotting Factor

A protein in the blood plasma that is essential for the clotting process to prevent excessive bleeding.

Cri Du Chat Syndrome

A human genetic disease caused by losing part of the short arm of chromosome 5 and characterized by intellectual disability, a cry that sounds like a kitten mewing, and death in infancy or childhood.

Chromosome 5

One of the 23 pairs of human chromosomes, containing genes that are essential for various cellular functions and hereditary traits.

Aneuploidies

The presence of an abnormal number of chromosomes in a cell, leading to genetic imbalances and often associated with diseases.