1. Assume you have $100 in an account that pays 6%. Using the Rule of 72, how lo
ID: 1942243 • Letter: 1
Question
1. Assume you have $100 in an account that pays 6%. Using the Rule of 72, how long does it take to become $200? Explain how you got your answer.2. What are two advantages to investing in mutual funds?
a.
b.
3. Explain what the word “risk” has to do with buying stocks?
4. If you have a mutual fund that pays dividends, what are your two choices of ways to receive your dividends?
a.
b.
5. You buy a stock in McDonalds for $5. One year later, the stock has risen to $12. You decide to sell your stock. What is your profit?
Explanation / Answer
1 $6 per year so, $100 in 100/6 = 16.67 yrs 2 a) security of money b) no short term losses 3 When somebody invests then there is always a chance that price of stock may increase or decrease, this gamble which one takes is called risk. 4) a) In terms of stocks b) In terms of money from stocks 5) profit = sell price -cost =12-5 = $7
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.