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Calculate the price of asset today

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A risky asset is expected to deliver $600 at the end of the first year, $50 at the end of the second year, and no further cash flows after that. The risk-free nominal interest rate is 4% and the risk premium of potential buyers is 1%. Calculate the price of this asset TODAY. ALSO, if the same future cash flows were known for certain (i.e. without risk), calculate the price today. (Show your work)

Reference no: EM132600961

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