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Question
Your sister paid $10,000 (CF at t = 0) for an investment that promises to pay $750 at the end of each of the next 5 years, then an additional lump sum payment of $10,000 at the end of the 5th year. What is the expected rate of return on this investment?a. 6.77%
b. 7.13%
c. 7.50%
d. 7.88%
e. 8.27%
Answer
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