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An investor is considering two equally risky investments. Investment A is expected to return $1,000 per year for the next 5 years. Investment B is
An investor is considering two equally risky investments. Investment A is expected to return $1,000 per year for the next 5 years. Investment B is expected to return $6,000 at the end of 5 years. Which of the following statements is most correct if both investments A and B have the same cost? A) A risk averse investor will select investment A because it provides cash earlier than investment B B) The investor may select investment A or investment B depending on the opportunity cost of money C) The investor will select investment A only if the cost is less than $1,000 D) A risk adverse investor will select investment B because it is expected to provide the most cash ($6,000>$5,000)
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