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Identify the risk and the return in each of the following examples.
a. Investing $500 in a certificate of deposit at 4.5% interest.
b. Placing a $100 bet on an NBA game.
c. Investing $10,000 in Microsoft stock.
d. Borrowing $20,000 in student loans.
Semiannual Interest
Interest that is both computed and disbursed semi-annually on an investment or loan.
Bond Discount
The financial disparity that occurs when a bond is sold for an amount below its stated face value, comparing its selling price to its face value.
Interest Method
A financial calculation used to determine the amount of interest due or earned over a specific period of time, considering factors like principal, rate, and time.
Annuity
An investment vehicle that provides a consistent series of payments to a person, mainly serving as a source of income for those who have retired.
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