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The problem is asking to calculate the no-arbitrage price of an investment, which pays a single $300 payment in 3 years, given that the risk-free rate is 4.75%.

To find the no-arbitrage price, we will discount the $300 payment back to the present value using the risk-free rate. The formula for the present value (PV) of a future payment is:

\[
PV = \frac{F}{(1 + r)^n}
\]

Where:
- $ F $ is the future payment (in this case, $300),
- $ r $ is the risk-free rate (4.75% or 0.0475 as a decimal),
- $ n $ is the number of years (3 years).

Let's calculate the no-arbitrage price.The no-arbitrage price of the investment is approximately **$261.01**.

Would you like further details or have any questions?

Here are five related questions you may explore:
1. How does the no-arbitrage price change with different interest rates?
2. What is the future value of an investment if the present value is known?
3. What is the difference between arbitrage and no-arbitrage pricing?
4. How does inflation impact the real value of future cash flows?
5. Can this calculation be applied to investments with multiple future payments?

**Tip:** The lower the discount rate (risk-free rate), the higher the present value of a future payment.

An investment is risk-free and promises to pay you a single $300 payment in 3 years from now. The current risk-free rate is 4.75%. What is the no-arbitrage price of this investment?

Learn how to calculate the no-arbitrage price of a risk-free investment with a $300 payment due in 3 years, using a 4.75% risk-free rate. This example covers key financial concepts such as present value calculation and no-arbitrage pricing.

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