An Investor Wants to Invest $10,000 Today in a Stock

question 59

Multiple Choice

An investor wants to invest $10,000 today in a stock with an expected compound rate of return of7% annually over the next five years. She intends to reinvest all dividends. What will be the valueof her investment (rounded to the nearest dollar) at the end of the five-year period if her expectation about future rates of returns is correct?

• A) $14,693
• B) $12,800
• C) $13,435
• D) $14,111

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Definitions:

Socializing Agents

Individuals, groups, or institutions that play significant roles in integrating individuals into the norms, values, and beliefs of their society.

Criterion Validity

Criterion validity refers to the extent to which a measure is related to an outcome.

Instrument Design

The process of creating tools or systems for specific purposes, often involving considerations of functionality, user experience, and efficiency.

Salary Increase

An upward adjustment to an employee's base compensation as a reward for performance, promotion, or inflation adjustments.