Consider the claim that rational investors are not willing to pay more for an investment than its present value. Which of the following statements is not part of a sound argument for this claim? Buying above the present value implies an economic loss, i.e. a superior alternative foregone. It is very hard to find an offer below the market price. The present value of an investment is the price at which the same future cash flows could be acquired on the market at the going rate of return on comparable alternative investments. Rational investors compare the alternatives available to them.

Consider the claim that rational investors are not willing to pay more for an investment than its present value. Which of the following statements is not part of a sound argument for this claim? Buying above the present value implies an economic loss, i.e. a superior alternative foregone. It is very hard to find an offer below the market price. The present value of an investment is the price at which the same future cash flows could be acquired on the market at the going rate of return on comparable alternative investments. Rational investors compare the alternatives available to them.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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