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Suppose the Current Price of Gold Is $650 Per Ounce

Question 5

Multiple Choice

Suppose the current price of gold is $650 per ounce. The price of gold is expected to grow at 5 percent per year for the foreseeable future. If the appropriate discount rate is 8 percent, the present value of gold is


A) less than $650 per ounce.
B) greater than $650 per ounce.
C) $650 per ounce.
D) Not enough information is provided.

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