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An Individual Has an Income of $4,000 in Period 0

Question 26

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An individual has an income of $4,000 in period 0 and $0 in period 1. The individual has the potential investment opportunities given below:
An individual has an income of $4,000 in period 0 and $0 in period 1. The individual has the potential investment opportunities given below: At what market rates of interest would make the individual indifferent between (1) all consumption in Period 0 and none in Period 1 and (2) no consumption in Period 0 and all consumption in Period 1? At what market rates of interest would make the individual indifferent between (1) all consumption in Period 0 and none in Period 1 and (2) no consumption in Period 0 and all consumption in Period 1?

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Determine rates of return; A-8%, B-20%, ...

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