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Use the table for the question(s) below. Security Cash flow today Cash flow in one year A 0 100 B 100 0 C 100 100
Use the table for the question(s) below.
Security | Cash flow today | Cash flow in one year |
A | 0 | 100 |
B | 100 | 0 |
C | 100 | 100 |
Suppose you are in a normal market. (Recall: normal market is a competitive market in which there are no arbitrage opportunities). The value of security "A" is 90, the value of security B is ____, the value of security C is ___.
A. | 100; cannot determine for C, need interest rate information | |
B. | 100; 190 | |
C. | 100; 200 | |
D. | cannot determine for both B and C, need interest rate information |
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