Assignment Help - homework help

Someone is going to give you money because you are awesome


Someone is going to give you money because you are awesome! They have given you three choices:

Option A - They will give you $205 today.

Option B - They will give you $225 in 2 years.

Option C - They will give you $75 today, $50 in 1 year, and $90 in 2 years.

  1. The risk-free rate is 4%. Which option should you choose (for the highest present value)?
  2. The 1 year annual risk-free rate is 4% and the 2 year annual risk-free rate is 6%. Which option should you choose (for the highest present value)?

Solution Preview :

Prepared by a verified Expert
Finance Basics: Someone is going to give you money because you are awesome
Reference No:- TGS02773001

Now Priced at $15 (50% Discount)

Recommended (99%)

Rated (4.3/5)