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Business, 07.04.2020 17:49 vane1161

You have $12 000 in cash. You can deposit it today in an investment fund earning 8.2 per cent semiannually, or you can wait, enjoy some of it, and invest $11 000 in your brother’s business in 2 years. Your brother is promising you a return of at least 10 per cent on your investment. Whichever alternative you choose, you will need to cash in at the end of 10 years. Assume your brother is trustworthy and both investments carry the same risk. Which one will you choose?

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