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?

Tara incorporates her sole proprietorship, transferring it to newly formed black corporation. the assets transferred have an adjusted basis of $240,000 and a fair market value of $300,000. also transferred was $10,000 in liabilities, $1,000 of which was personal and the balance of $9,000 being business related. in return for these transfers, tara receives all of the stock in black corporation. a. black corporation has a basis of $241,000 in the property. b. black corporation has a basis of $240,000 in the property. c. tara’s basis in the black corporation stock is $241,000. d. tara’s basis in the black corporation stock is $249,000. e. none of the above.

When selecting a savings account, you should look at the following factors except annual percentage yield (apy) fees minimum balance interest thresholds taxes paid on the interest variable interest rates

Determine if the following statements are true or false. an increase in government spending can crowd out private investment. an improvement in the budget balance increases the demand for financial capital. an increase in private consumption may crowd out private investment. lower interest rates can lead to private investment being crowded out. a trade balance in sur+ increases the supply of financial capital. if private savings is equal to private investment, then there is neither a budget sur+ nor a budget deficit.