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I'd appreciate a well-organized, detailed solution to help me study the questions. A rich, friendly, and generous benefactor offers you the opportunity to invest $1
I'd appreciate a well-organized, detailed solution to help me study the questions. A rich, friendly, and generous benefactor offers you the opportunity to invest $1 million in two mutually exclusive ways. The payoffs are: i. \$2 million after 1 year (i.e., a 100\% return). or ii. $300,000 a year forever. Neither investment is risky, and safe securities are yielding 7.5\%. Which is better in this case: Earning a high percentage return or Getting rich? You can't take both investments as the choices are mutually exclusive. (Note: If you really had this investment opportunity, you'd have no trouble borrowing the money to undertake it
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