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Which security do you choose

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Question - Suppose you are given a choice of the following two securities: (a) an annuity that pays $10,000 at the end of each of the next 6 years; or (b) a perpetuity that pays $10,000 forever, but the first cash payment is 11 years from today. Which security do you choose if the annual interest rate is 5%?

Reference no: EM132940215

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