Suppose that a risk-free investment will make three future payments of $500 in one year, $500 in two years, and $500 in three years.
instructions: round your answers to 2 decimal places.
a. if the federal reserve has set the risk-free interest rate at 12 percent, what is the proper current price of this investment?
$ 1,288.55
b. what is the price of this investment if the federal reserve raises the risk-free interest rate to 14 percent?
Answers: 3
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Suppose that a risk-free investment will make three future payments of $500 in one year, $500 in two...
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