Which of the following alternatives signify the difference between the present value of a $150 perpetuity and 2-year $150 annuity, both discounted at 15 percent per annum
a. The perpetuity would require an initial investment worth $100 while the annuity would require an initial investment worth $244.07.
b. The perpetuity would require an initial investment worth $1,500 while the annuity would require an initial investment worth $115.07.
c. The perpetuity would require an initial investment worth $1,000 while the annuity would require an initial investment worth $244.07.
d. The perpetuity would require an initial investment worth $100 while the annuity would require an initial investment worth $115.07.
C
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The main argument against Fed independence is that
A) in a democracy elected officials should make public policy. B) monetary and fiscal policy would be easier to coordinate if the Fed were not independent. C) the Fed has proven irresponsible on many occasions. D) congressional control was tried during the 1960s and it worked well.
Keynes argued that
a. irrational waves of pessimism cause decreases in aggregate demand and increases in unemployment. b. irrational waves of optimism cause decreases in aggregate demand and decreases in aggregate supply. c. changes in business and consumer expectations generally stabilize the economy. d. All of the above are correct.
Which of the following are reasons to suspect spending on education might overestimate human capital investment?
A) Education spending leaves out foregone wages. B) Part of total spending on education is really consumption. C) Much human capital investment comes from on-the-job training. D) all of the above E) none of the above
If high level of corruption in a country deters foreign investment in worthy projects, this is known as
A. foreign direct investment. B. adverse selection. C. dead capital investment. D. moral hazard.