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30.98% is wrong The following two investment options are viewed under an annual effective interest rate of i. Investment A is a 10-year zero coupon

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30.98% is wrong

The following two investment options are viewed under an annual effective interest rate of i. Investment A is a 10-year zero coupon bond which redeems at par-value 250. Investment B is a perpetuity-immediate paying an annual payment starting with 4 and having each successive payment increase by K% from the previous payment. If the volatility of each investment is 8, then find the value of K

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