You Are Starting Your First Job After College and Are

question 69

Essay

You are starting your first job after college and are looking for a mutual fund in which to invest some of your retirement savings. Your college economics course taught that it is virtually impossible to beat the market in the long run given the efficient markets hypothesis, so you are looking at funds that try to mimic the market and produce the same 7% annual return as the market has produced since 1802. You have narrowed it down to three mutual funds (A, B, and
C), all of which have consistently produced an average annual rate of return of 7%. Fund A charges a 1.5% annual fee, fund B charges 0.2% annually, and fund C is a no-fee fund. Compare how much your investment will be worth after 10 years if you initially invest $10,000 in fund A versus fund B versus fund C. How much will you end up paying in fees for each fund over the course of 10 years if your initial investment is $10,000?

Identify methods for analyzing data and discovering relationships through techniques such as cross-tabulation.

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Understand how to read and interpret Treasury note bid prices as quoted in financial publications.

Calculate value-weighted and price-weighted indexes using stock price and outstanding share data.

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Definitions:

Perceived Meaning

The personal significance or value that an individual attaches to a particular event, object, or aspect of their life.

Communication Process

The sequence of steps through which information is transmitted and received between senders and receivers, including encoding, medium selection, decoding, and feedback.

Completed

Finished; fully accomplished or having reached a conclusion.

Receiver

In communication, the individual or entity that receives, interprets, and possibly responds to a message sent by another.