Suppose the risk-free interest rate is 3.8%. a. Having $ 400 today is equivalent to having what amount in one year? b. Having $400 in one year is

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Suppose the risk-free interest rate is 3.8%.

a. Having $ 400 today is equivalent to having what amount in one year?

b. Having $400 in one year is equivalent to having what amount today?

c. Which would you prefer,$400 today or $400 in one year? Does your answer depend on when you need the money? Why or why not?

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