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You are considering investing in a security that will pay you $1,000 in 25 years. a. If the appropriate discount rate is 10 percent, what
You are considering investing in a security that will pay you
$1,000
in
25
years.
a.If the appropriate discount rate is
10
percent,
what is the present value of this investment?
b.Assume these investments sell for
$528
in return for which you receive
$1,000
in
25
years. What is the rate of return investors earn on this investment if they buy it for
$528?
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