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VLD [36.1K]
3 years ago
9

Based on what you have learned in the lesson and the assignment, write two or three sentences describing how short-term and long

-term investing options differ and when each is more appropriate.
Business
2 answers:
Cerrena [4.2K]3 years ago
6 0

Short-term investment options include savings and checking accounts. They usually have low risk, but they also provide lower returns. They are more liquid investments, meaning that they can be sold or changed easily. Long-term investments can provide higher returns; however, they are often more risky, and they can have lower liquidity.

When you are likely to need cash soon, a short-term investment would be wise. When you have the time and resources to try for a higher return, a long-term investment would be a good choice.

Ede4ka [16]3 years ago
6 0

Long –term investment                             

These are investments that you wish to have for a very long time. It usually last for more than a year.

Short-term investment

These are investment that you plan to keep for a short period of time. It usually short-term investments often last 6 months to 1 year.

 I think it depends on the trend. There are some investments that you can keep longer and there are some you can keep for a shorter time. If you wish to get an investment that can help you with your daily needs, you can try day trading. But if you wish to keep it longer, then look for business models that you think would last for a long time.

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The market price of a security is $50. Its expected rate of return is 14%. The risk-free rate is 6%, and the market risk premium
MatroZZZ [7]

The market price of a security is $50. Its expected rate of return is 14%, and the market price of the security  is mathematically given as

MR=27.368

<h3>What will be the market price of the security if its correlation coefficient with the market portfolio doubles?</h3>

Generally, the equation for expected rate return is mathematically given as

RR=(Rf+beta*(Rm-Rf)

Therefore

RR=(Rf+beta*(Rm-Rf)

Beta= (13-7)/8

Beta=0.75

In conclusion, the market price of a security

MR=DPs/RR

Where

Po=DPS/RR'

DPS=40*0.13

DPS=$5.23

and

RR=&+1.5*8

RR=19%

Hence

MR=$5.23/0.19

MR=27.368

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7 0
1 year ago
You have recently won the super jackpot in the Washington State Lottery. On reading the fine print, you discover that you have t
icang [17]

Answer:

should choose option a

Explanation:

option a)

annuity due, 31 payments of $180,000 per year, 6.25% discount rate

Present value = $180,000 x 14.40432 (PV annuity due factor, 6.25%, 31 periods) = $2,592,726

option b)

$500,000 today + ordinary annuity, 30 periods, 6.25%, $144,000

present value = $500,000 + ($144,000 x 13.40432 [PV annuity factor, 6.25%, 30 periods)] = $2,430,222

6 0
2 years ago
Upply and demand
Gennadij [26K]
C.

When a product is overstocked, owners will usually price the product less so that it will sell out more quickly.
3 0
3 years ago
Because of the substitution problem, the cpi tends to overstate the true change in the price of the typical basket of consumer g
butalik [34]

It is true that because of the substitution problem, the CPI tends to overstate the true change in the price of the typical basket of consumer goods.

<h3>What is CPI?</h3>
  • A consumer price index measures a market basket of goods and services that households have purchased at a weighted average price.
  • The measured CPI fluctuates to reflect changes in prices over time.
  • One of the most popular methods for determining inflation and deflation is the CPI.
  • An essential gauge of an economy's health is inflation. The CPI and other indexes are used by governments and central banks when making economic decisions.
  • The decision to raise or cut interest rates is crucial among these.
  • If the CPI increases, it indicates that the average rate of change in price over time has increased. The cost of living and income are eventually changed as a result of this.

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7 0
1 year ago
State two reasons why people work
Hunter-Best [27]

Answer:

earn money, make a change, fulfill their dreams

Explanation:

3 0
2 years ago
Read 2 more answers
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