1 - San Francisco State University

The present value of a perpetuity can never be calculated because the sum of cash flows in a perpetuity is infinite. That is, the present value of a perpetuity is infinite. 6. Suppose a U.S. government bond will pay $1,000 three years from now. If the going interest rate on 3-year government bonds is 5%, how much is the bond worth today? a. $863.84 ................
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