Question
Chris has no money of his own but has come up with a project that requires investment cost of $3,000 today and will pay off
Chris has no money of his own but has come up with a project that requires investment cost of $3,000 today and will pay off $5,500 in one year. Capital markets function perfectly. Therefore, Chris can borrow and lend at 10% per year as much as he wants.
Find out the maximum amount of consumption Chris can enjoy in one year from today.
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Handbook Of The Equity Risk Premium
Authors: Rajnish Mehra
1st Edition
0444508996, 978-0444508997
