Question
6. Portia received a $1,000 savings bond from her grandparents when she turned 10. The bond matures when she turns 25, meaning Portia will receive
6.
Portia received a $1,000 savings bond from her grandparents when she turned 10. The bond matures when she turns 25, meaning Portia will receive $1,000 cash when she turns 25. Portia is currently 18 years old. Assuming a positive cost of capital, what is the minimum price that Portia would be willing to sell the bond for today?
Price > $1,000
Price < $1,000
Price = $2,000
Price = $1,000
Molly and Walter both own annual annuities that pay them $1,000 payments each year. Walter's annual payments begin in two years and last for six years. Molly's annual payments begin in four years and also last for six years.
If both Molly and Walter invest their annuity payments in a bank account earning the same rate of interest, who will have more money at the time that they receive their last annuity payment, Molly or Walter?
Neither, Molly and Walter will have the same amount
Molly will have more money
Walter will have more money
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