2 A hedge fund manager requires 10% minimum return for all their investments. An opportunity presents to get $1,000,000 in three years. What is the maximum price that the hedge fund manager should be willing to pay for this investment? O $753,314.8 O $749,314.8 O $756,314.8 O $751,314.8

2 A hedge fund manager requires 10% minimum return for all their investments. An opportunity presents to get $1,000,000 in three years. What is the maximum price that the hedge fund manager should be willing to pay for this investment? O $753,314.8 O $749,314.8 O $756,314.8 O $751,314.8

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter2: Risk And Return: Part I

Section: Chapter Questions

Problem 9P

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Question

Hi I need the answer to this question thanks?

A hedge fund manager requires 10% minimum return for all their investments. An opportunity presents to get $1,000,000 in three years. What is the maximum price that the
hedge fund manager should be willing to pay for this investment?
$753,314.8
$749,314.8
$756,314.8
$751,314.8

Expert Solution

Step 1

The maximum amount fund manager should be willing to pay for this investment is the present value of future cashflows

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