Consider the graph without knowing further information, what should the owner of this property do in Year 10 a) increase the discount rate b) it depends c) hold d) sell Return ( ) 13 12 11 10 a 00 60 5 1 7 1 I 1 Optimal Holding 7 00 8 9 10 Reinvestment Rate Year 11 I 12 MRR 13 14 15

Question: Consider the graph without knowing further information, what should the owner of this property do in Year 10? a) increase the discount rate b)

Consider the graph without knowing further information, what should the owner of this property do in Year 10?

Return (%) 13 12 11 10 a 00 60 5 1 7 1 + I 1 Optimal Holding 7 00 8 9 10 Reinvestment Rate Year 11 I 12 MRR

a) increase the discount rate

b) it depends

c) hold

d) sell

Return (%) 13 12 11 10 a 00 60 5 1 7 1 + I 1 Optimal Holding 7 00 8 9 10 Reinvestment Rate Year 11 I 12 MRR 13 14 15

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