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QUESTION 3 Jerry is going to receive $ 2 0 , 0 0 0 as lottery winnings in one year. He calculates the present value

QUESTION

3

Jerry is going to receive $

20, 000

as lottery winnings in one year. He calculates the present value of this cash flow using an interest

rate. The interest rate he used is referred to as:

current yield

discount rate

compound rate

prime rate

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