Elizabeth is offered to buy a financial security

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Reference no: EM13894214

Elizabeth is offered to buy a financial security that guarantees to pay her $10 every 2 years forever. The annual interest rate is 8%.

(a) How much would she pay for it today if the first payment will be received today?

(b) How much would she pay for it today if the first payment will be received in 1 year?

Reference no: EM13894214

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