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Question: there are three options of investment if you invest 1000...

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There are three options of investment: If you invest 1000 now, you will receive 375 each at the end of next three years. If you invest 1000 now, you will receive 1080 at the end of 1st year. If you invest 1000 now, you will receive 1100 at the end of 2nd year. Risk-free interest rate is assumed to be 5%.

  1. Would you invest any of them? Why?
  2. Which one would you pick?    Why?

  

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