BUSN 380 help Making Decisions/uophelp.com BUSN 380 help Making Decisions/uophelp.com | Page 57

When choosing an investment, it is necessary to consider the risk factor.
During inflationary times, there is a risk that the financial return on an
investment will not keep pace with the rate of inflation.
The interest rate risk associated with investments in bonds is the result
of changes in business conditions faced by companies.
The risk of business failure deals with changes in the value of stocks and
bonds due to changes and risks within a business itself.
The prices of stocks, bonds, and other investments fluctuate in the
market.
Question 6. Question : (TCO 5) A $1,000 corporate bond pays 9.0% a
year. What is the annual interest you will receive?
$90.00
$9.50
$900
$9,000
$0.90
Question 7. Question : (TCO 5) Jeremy is 22 years old and single. He
recently graduated from college and started his career making $30,000 a
year. He has come to you asking for advice regarding a long-term
investment program. What would you recommend?
Government bonds
Corporate bonds
Commodities
A money-market fund