Suppose you have three choices now. As shown in the following table, in Choice One,...
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Suppose you have three choices now. As shown in the following table, in Choice One, I will give you $500 today; In Choice Two, I will give you $550 in Year 2; In Choice Three, I will give you $100 today, $200 in Year 1, and $240 in Year 3. If the interest rate is 1% in Year 1, and 5% in Year 2. And there will be a 5% of risk that I can not give you the money in Year 1, and a 10% of risk that I can not give you the money in Year 2. Please discuss which choice is the best.
|
| Choice One | Choice Two | Choice Three |
| Today | $500 |
| $100 |
| Year 1 |
|
| $200 |
| Year 2 |
| $550 | $240 |
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