An Investor Is Faced with a Decision of Investing $5,000

question 23

Multiple Choice

An investor is faced with a decision of investing $5,000. The investor is in no hurry to cash in on their gains and is considered risk-averse. Which option should they choose?

• A) The 2% rate, because it is the longest payout
• B) The 3% rate
• C) The 6% rate, because it is the highest guaranteed return
• D) The 10% rate, because the risk is worth the higher return
• E) Either the 2% rate or the 6% rate, as they both offer the same total return

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Definitions:

Havana

The capital city, major port, and leading commercial center of Cuba, known for its historical buildings, vibrant culture, and significant role in the Caribbean region.

Rising Power

Refers to a nation or entity that is becoming increasingly influential and strong in economic, political, or military terms on the global stage.

Open Door Policy

Demand in 1899 by Secretary of State John Hay, in hopes of protecting the Chinese market for U.S. exports, that Chinese trade be open to all nations.

Investment Opportunities

Prospects or options to invest capital with the potential to generate a return.