Suppose a friend offers to borrow $100 from you today and in return pay you $110 one

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Suppose a friend offers to borrow $100 from you today and in return pay you $110 one year from today. Looking in the market for other options for investing the $100, you find your best alternative option that you view as equally risky as lending it to your friend. That option has an expected return of 8%. What should you do?

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Fundamentals Of Corporate Finance

ISBN: 9781292437156

5th Global Edition

Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford

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