Suppose a security with a risk-free cash flow of $150 in one year trades for $140 today.

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Suppose a security with a risk-free cash flow of $150 in one year trades for $140 today. If there are no arbitrage opportunities, what is the current risk-free interest rate?

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Corporate Finance

ISBN: 978-0133097894

3rd edition

Authors: Jonathan Berk and Peter DeMarzo

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Question Posted: Jul 27, 2014 02:17 AM

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Suppose a security with a risk-free cash flow of $150 in one year trades for $140 today.

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The PV of the securitys cash flow is 150 in one year1 r where ...View the full answer

Corporate Finance

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