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    Contemporary Financial Management Study Set 2
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    Exam 6: Continuous Compounding and Discounting
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    You Have Just Won a Lottery That Promises to Pay
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You Have Just Won a Lottery That Promises to Pay

Question 7

Question 7

Multiple Choice

You have just won a lottery that promises to pay you $1,000,000 in 5 years. What is the present value of this lottery win at the continuously discounted rate of 10%?


A) $621,000
B) $606,531
C) $648,720
D) $904,837

Correct Answer:

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