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What is the formula of rate of return

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Reference no: EM132270308

In Keynesian theory of investment, suppose an asset costs $1000 and it is expected to yield $600 at the end of year 1 and $600 at the end of the second year (and zero thereafter), then r* (rate of return associated with marginal project) will be

a) 10%

b) 11%

c) 12%

d) 13%

What is the formula of rate of return?

Reference no: EM132270308

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