Question
If you invest (a) $100 today and get $110 in a year, it is the same rate of return as investing (b) $1,000 today and
If you invest (a) $100 today and get $110 in a year, it is the same rate of return as investing (b) $1,000 today and getting back $1,100 in a year. (please explain answer)
a) Earning $10 is not as good as earning $100 so the rate of return doesnt matter.
b) Earning $100 seems riskier than earning $10 so I would rather invest $100 today than invest $1,000 because I would rather lose $100 than $1,000.
c) Rate of return doesnt matter because it is the dollar return that is more important.
d) I would be emotionally indifferent to the amount I would invest because the rate of return is the same.
e) None of the above.
f) Only (a) and (b).
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