Zoey Is Planning to Invest $5,000 in a Fixed Income

question 47

Multiple Choice

Zoey is planning to invest $5,000 in a fixed income security at the end of each of the next four years. She will receive $23,000 at the end of four years. If interest is compounded annually, what is the annual rate of return earned on the investment?

• A)5.7%
• B)7.3%
• C)8.7%
• D)10.2%
• E)9.4%

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Definitions:

Standard Deviation

A statistical metric that quantifies the variation or dispersion of a set of data points from the mean.

Mean Content

The average value or quantity present in a given set of data or material.

Population Mean

The average value of all the elements in a population, symbolically represented by the Greek letter mu (μ).

Simple Random Sample

A subset of individuals chosen from a larger set where each individual has an equal chance of being selected.