Refer to the Table Representing Darcy's Bank Account

question 43

Multiple Choice

Refer to the table representing Darcy's bank account. If she deposited $1,000 into her account at the beginning of year 1 and made no further deposits or withdrawals, the $1,191 value at the end of year 3 represents the

• A)discounted value of the $1,000 deposit made at the beginning of year 1.
• B)present value of the $1,000 deposit made at the beginning of year 1.
• C)future value of the $1,000 deposit made at the beginning of year 1.
• D)present value of the interest earned over the three-year period.

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Definitions:

Investment

The allocation of resources, usually financial, in expectation of generating an income or profit.

Portfolio Expected Return

The weighted average of the expected returns of the assets in an investment portfolio.

Equal Investment

A strategy where equal amounts of capital are allocated to each investment within a portfolio.

Stocks

Shares of ownership in a company that represent a claim on part of the company's earnings and assets.