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3 years ago

Why would a conservative investor invest in more short term bonds than long term bonds?

2 answers:

7 0

<span>A conservative investor invests in more short term bonds than long term bonds because they believe long term bonds are not efficient.
</span>Some investors think that bonds are “safe,” , stocks are “risky”.

<span>Short-term bonds on the other hand, seems to be attractive to many investors, specifically the conservative ones because they don't require you to tie up your money for long. </span>

faust18 [17]3 years ago

6 0

Answer and explanation:

Conservative investor invest more in short term bonds than long term bonds because the longer the term of bond is , the higher the risk it possess.

Risk associated with the long term bonds is that if there is increase in inflation, it could reduce the value of payments.

And higher interest rate reduce the price of bonds.

Due to that reasons, conservative investor prefers short term bonds to long term bonds.

You might be interested in

The mean score of 8 players is 14.5. If the highest individual score is removed the mean of the score of the remaining 7 players

AfilCa [17]

Answer:

The highest score is 32.

Step-by-step explanation:

We are given the following in the question:

The mean score of 8 players is 14.5.

Let x denote the highest score.

If x is removed, the mean of the score of the remaining 7 players is 12.

Formula for mean:

$\bar{x} = \dfrac{\displaystyle\sum x_i}{n}$

Putting values, we get:

$14.5 = \dfrac{\displaystyle\sum x_i}{8}\\\\\Rightarrow \displaystyle\sum x_i = 116\\\\12 = \dfrac{\displaystyle\sum y_i}{7}\\\\\Rightarrow \displaystyle\sum y_i = 84\\\\\displaystyle\sum y_i = \displaystyle\sum x_i -x \\\\84 = 116 - x\\\Rightarrow x = 32$

Thus, the highest score is 32.

4 0

4 years ago

reuben deposits $700 into an account that pays simple interest at a rate of 5% per year. How much interest will he be paid in th

meriva

The answer is to this question is $105.

6 0

4 years ago

Two points on a line L are (5,2) and (7,-4). what is the slope of L

klemol [59]

Answer:

-3

Step-by-step explanation:

The slope of a line can be calculated with the formula (y2-y1)/(x2-x1)

In this case we have:

(-4-(2))/(7-5)

(-6)/(2)

-3

Let me know if this helps!

8 0

3 years ago

-8÷+12×9-4×6÷56÷7×2

EastWind [94]

Answer:

$\frac{ - 300}{49}$

or -6.122

Step-by-step explanation:

In answering this kind of questions, you must take note of BODMAS. that is;

B - Bracket

O - Of (multiplication)

D - Division

M - Multiplication

A - Addition

S - Subtraction

and you have to answer by the order above to get the correct answer. thank you

hope it helps .

4 0

4 years ago

Read 2 more answers

Ms. Whodunit needs $15 000 to go on her dream vacation in four years. How much

lisov135 [29]

For each situation, we have that:

11) Using compound interest, it is found that she needs to invest $9,781.11 now.

12) Using the future value formula, it is found that you will have $728,753 after 48 years.

<h3>What is compound interest?</h3>

The amount of money earned, in compound interest, after t years, is given by:

$A(t) = P\left(1 + \frac{r}{n}\right)^{nt}$

In which:

A(t) is the amount of money after t years.

P is the principal(the initial sum of money).

r is the interest rate(as a decimal value).

n is the number of times that interest is compounded per year.

For this problem, the parameters are given as follows:

A(t) = 15000, t = 4, r = 0.055, n = 2.

Hence we solve for P to find the amount that needs to be invested.

$A(t) = P\left(1 + \frac{r}{n}\right)^{nt}$

$15000 = P\left(1 + \frac{0.055}{2}\right)^{2 \times 8}$

$(1.0275)^{16}P = 15000$

$P = \frac{15000}{(1.0275)^{16}}$

P = $9,718.11.

She needs to invest $9,781.11 now.

<h3>What is the future value formula?</h3>

It is given by:

$V(n) = P\left[\frac{(1 + r)^{n-1}}{r}\right]$

In which:

P is the payment.

n is the number of payments.

r is the interest rate.

For item 12, the parameters are given as follows:

P = 150, r = 0.07/12 = 0.005833, n = 48 x 12 = 576.

Hence the amount will be given by:

$V(n) = P\left[\frac{(1 + r)^{n-1}}{r}\right]$

$V(n) = 150\left[\frac{(1.005833)^{575}}{0.005833}\right]$

V(n) = $728,753.

You will have $728,753 after 48 years.

More can be learned about compound interest at brainly.com/question/25781328

#SPJ1

6 0

2 years ago