Suppose Nara Could Invest Her $1000 in a Savings Account

question 216

Multiple Choice

Suppose Nara could invest her $1000 in a savings account or she could invest in the stock market. After one year, the savings account has a guaranteed 5 percent interest rate and the stock market has a 10 percent chance of tripling her money, and 90 percent chance of losing it all. What is Nara's expected wealth if she places her money in the savings account?

• A) $1,050
• B) $50
• C) $300
• D) $1,300

Understand the compatibility of Word documents across different versions of Microsoft Word.

Learn to customize lists using different bullet characters and styles.

Master the manipulation of table rows and cells within Word documents.

Grasp the concept of using, modifying, and creating styles and themes in Word.

---

Definitions:

Nonvoting Preferred Stock

A type of preferred stock that does not grant the holder voting rights in the company's shareholder meetings, typically in exchange for certain financial preferences.

Outstanding Shares

The total number of shares of stock that are currently owned by shareholders, including shares held by institutional investors and restricted shares held by insiders and company officers.

Balance Sheet

An accounting statement that captures the financial standing of a corporation by itemizing assets, obligations, and shareholders' capital at a certain time.

Available-For-Sale Debt Investments

Debt securities not classified as held-to-maturity or trading securities, carried at fair value, with unrealized gains or losses reported in other comprehensive income.