Author Question: You believe in the power of compounding and decide to save 1 per day by avoiding the purchase of a ... (Read 16 times)

penguins · **on:** Jul 11, 2018

You believe in the power of compounding and decide to save 1 per day by avoiding the purchase
of a soda. You deposit the 1 at the end of each day in a bank account that pays 8 interest
compounded daily.

You are going to take a trip in 20 years with the money you have accumulated.
How much money will you have in 20 years, assuming 365 days per year?
A) 7,500 B) 18,032 C) 12,438 D) 22,456

Question 2

Based on the security market line, Robo-Tech stock has a required return of 14 and Friendly
Insurance Company has a required return of 10. Robo-Tech has a standard deviation of returns of
18. Therefore,

A) the beta for Friendly must be greater than the beta for Robo-Tech because Friendly is the
better buy for a risk-averse investor.
B) Friendly must have a standard deviation of returns of less than 18 because Friendly is less
risky than Robo-Tech.
C) all rational investors will prefer Friendly over Robo-Tech.
D) for a well-diversified investor, Friendly is less risky than Robo-Tech.

mcinincha279 · **Reply #1 on:** Jul 11, 2018

A FREE account is required to view all solutions!

Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.

Answer Preview

Only 55% of students answer this correctly