Kaylinne8882 Kaylinne8882

12-02-2020
Business

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Suppose that a risk-free investment will make three future payments of $100 in one year, $100 in two years, and $100 in three years. If the Federal Reserve has set the risk-free interest rate at 8 percent, what is the proper current price of this investment?

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kaympoey08 kaympoey08

13-02-2020

Answer:

The answer is $ 257.70

Explanation:

PV= Σ of discounted payments

PV = 100(1.08^-1) + 100(1.08^-2) + 100(1.08^-2)= $ 257.70

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