You are thinking about investing $4,865 in your friend's landscaping business. Even though you know the investment is risky and you can't be sure, you expect your investment to be worth $5,744 next year. You notice that the rate for one-year Treasury bills is 1%. However, you feel that other investments of equal risk to your friend's landscape business offer an expected return of 7% for the year. What should you do? The present value of the return is $_______ (Round to the nearest cent.)
You are thinking about investing $4,865 in your friend's landscaping business. Even though you know the investment is risky and you can't be sure, you expect your investment to be worth $5,744 next year. You notice that the rate for one-year Treasury bills is 1%. However, you feel that other investments of equal risk to your friend's landscape business offer an expected return of 7% for the year. What should you do? The present value of the return is $_______ (Round to the nearest cent.)
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
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You are thinking about investing $4,865 in your friend's landscaping business. Even though you know the investment is risky and you can't be sure, you expect your investment to be worth $5,744 next year. You notice that the rate for one-year Treasury bills is 1%. However, you feel that other investments of equal risk to your friend's landscape business offer an expected return of 7% for the year. What should you do?
The present value of the return is $_______ (Round to the nearest cent.)
Transcribed Image Text:You are thinking about investing $4,865 in your friend's landscaping business. Even though you know the investment is risky and you can't be sure, you expect your
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investment to be worth $5,744 next year. You notice that the rate for one-year Treasury bills is 1%. However, you feel that other investments of equal risk to your
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