Your insurance policy has matured today. Your Insurance company offers two options: (a) 500000 today and another 500,000 at the end of 5 years; (b) 100,000 today and 1,000,000 at the end of 5years. Which one of these two options is attractive if the interest rate is 8% per year? Option (a) 500,000 today and another 500,000 at the end of 5 years Option (b) 100,000 today and another 1,000,000 at the end of 5 years Both options are equal None of the above
Your insurance policy has matured today. Your Insurance company offers two options: (a) 500000 today and another 500,000 at the end of 5 years; (b) 100,000 today and 1,000,000 at the end of 5years. Which one of these two options is attractive if the interest rate is 8% per year? Option (a) 500,000 today and another 500,000 at the end of 5 years Option (b) 100,000 today and another 1,000,000 at the end of 5 years Both options are equal None of the above
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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Your insurance policy has matured today. Your Insurance company offers two options: (a) 500000 today and another 500,000 at the end of 5 years; (b) 100,000 today and 1,000,000 at the end of 5years. Which one of these two options is attractive if the interest rate is 8% per year?
Option (a) 500,000 today and another 500,000 at the end of 5 years
Option (b) 100,000 today and another 1,000,000 at the end of 5 years
Both options are equal
None of the above
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