You have $12,000 in cash. You can deposit it today in a mutual fund earning 8.2 percent
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You have $12,000 in cash. You can deposit it today in a mutual fund earning 8.2 percent compounded semiannually, or you can wait, enjoy some of it, and invest $11,000 in your brother’s business two years from today. Your brother is promising you an annual return of 10 percent on your investment, but you will receive zero return for the two years that you are waiting to invest with him. Assume that both investments have the same risk. Which investment will give you the largest amount 10 years from today?
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Related Book For
Fundamentals Of Corporate Finance
ISBN: 9781119795438
5th Edition
Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates
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