Suppose therisk-free interest rate is 3.8%. a. Having $ 400 today is equivalent to having what amount
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Question:
Suppose therisk-free interest rate is 3.8%.
a. Having $ 400 today is equivalent to having what amount in oneyear?
b. Having $400 in one year is equivalent to having what amounttoday?
c. Which would youprefer,$400 today or $400 in oneyear? Does your answer depend on when you need themoney? Why or whynot?
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