1. 2. You have recently learned about the concept of compound interest (also cal
ID: 1180259 • Letter: 1
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You have recently learned about the concept of compound interest (also called compound returns) in your economics class and it has motivated you to invest some of your money. You are thinking of investing $3600 this year. You are getting investing advice from a lot of your friends and relatives. Four investment ideas that stand ou to you are: Aunt Harriet's idea of a one time $3600 investment that you leave in the stock market for 10 years (with a 9% average rate of return). Your friend Habershab's idea of investing $3600 that you leave for 20 years in a 5% certificate of deposit. Your grandpa Judah's idea of putting $3600 one time for 40 years in a 0.5% savings account. Your cousin Atsuko's idea of putting $3600 that you leave for 30 years in a 2% money market fund. To keep this question relatively simple, ignore any other monetary information, such as the value of a dollar in terms of inflation and exchange rates or any reinvesting (the options below are the only options) How much money will you have at the end of 10 years if you pick Aunt Harriet's advice? How much money will you have at the end of 20 years if you pick Habershab's advice? How much money will you have at the end of 40 years if you pick Grandpa Judah's advice? How much money will you have at the end of 40 years if you pick Grandpa Judah's advice? How much money will you have at the end of 30 years if you pick your cousin Atsuko's advice? Who gave you the best advice in terms of the highest amount you have in total at the end of the investment? In the stock market, there are buyers and sellers. One stock market hypothesis relates to how an investor cannot earn returns that outperform the overall stock market if they only have public stock market information. Which of these options best represents this concept? Efficient Markets Hypothesis Ceteris Paribus Hypothesis Insider Trading Hypothesis None of the AboveExplanation / Answer
The answer for the second Question: Efficient Markets Hypothesis.
First Question.
Name Investment Years Rate Total Amount Formula Harriet $ 3,600 10 9.0% $ 8,522.5 C3*(1+E3)^d3 Habershab $ 3,600 20 5.0% $ 9,551.9 C4*(1+E4)^D4 Judah $ 3,600 40 0.5% $ 4,394.9 C5*(1+E5)^D5 Atsuko $ 3,600 30 2.0% $ 6,520.9 C6*(1+e6)^D6Related Questions
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