An Investment Promises a Payoff of $195 Two and One-Half

question 105

Multiple Choice

An investment promises a payoff of $195 two and one-half years from today.At a discount rate of 7.5% per year,what is the present value of this investment?

• A)$162.03
• B)$162.75
• C)$169.47
• D)There is not enough information to answer this question.

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Definitions:

External Locus of Control

A psychological concept referring to an individual's belief that external forces, beyond their personal control, significantly influence their life events and outcomes.

Type A Personality

A behavior pattern characterized by competitiveness, urgency, aggression, and a constant struggle to achieve more in less time.

Optimism

The tendency to maintain a generally hopeful outlook and to expect positive outcomes.

Type A Personality

A personality type characterized by competitiveness, urgency, aggression, and a constant sense of urgency.