Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Transcribed Image Text:Economics
Your friend is inviting you to this exciting
investment opportunity. To get in it costs 10,000
today but you will get 10,500 at the end of the
year.
a) What is the Internal Rate or Return of the
investment opportunity?
b) Suppose that the risk-free government bond
rate is 5 percent. Should you still invest with your
friend?
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