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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

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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