Assume that the economy has an annual inflation rate of 5 percent. Are the following investments profitable in real terms? (d) The spot price of silver is $31 per ounce. You purchase 50 ounces of silver for $1,600, in order to compensate the merchant. Over the year, the spot price of silver rises to $34 per ounce, and you are able to sell the silver you have at the spot price. (e) You purchase a Non-Fungible Token (NFT) for $98 million. The following year, you are able to sell it for $102.5 million.

Assume that the economy has an annual inflation rate of 5 percent. Are the following investments profitable in real terms? (d) The spot price of silver is $31 per ounce. You purchase 50 ounces of silver for $1,600, in order to compensate the merchant. Over the year, the spot price of silver rises to $34 per ounce, and you are able to sell the silver you have at the spot price. (e) You purchase a Non-Fungible Token (NFT) for $98 million. The following year, you are able to sell it for $102.5 million.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter2: The One Lesson Of Business

Section: Chapter Questions

Problem 2.6IP

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