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A Perpetuity Pays $100 Per Year and Interest Rates Are

Question 106

Multiple Choice

A perpetuity pays $100 per year and interest rates are 6.5 percent. How much would its value change if interest rates increased to 9 percent?

A) $250.00 increase
B) $250.00 decrease
C) $427.35 increase
D) $427.35 decrease

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