NewEnvironments: Three divisible assets

Suppose you have three divisible assets, A, B and C with internal rates of return 2%, 5% and 10% respectively and initial costs of $1, $3, $3.

Suppose you have $4 at 1% and can borrow at 12%. Which assets do buy?

Question options:

  • A
  • B

* C

  • Part of, but not all of, A

* Part of, but not all of, B

  • Part of, but not all of, C
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