Which of the Following Statements Is Correct for an Investor

question 12

Multiple Choice

Which of the following statements is correct for an investor starting with $1,000 in common stocks over a 20-year investment horizon in which stocks averaged 11 percent in nominal terms and 4 percent in real terms? The portfolio value is now approximately:

• A)$1,800 in real terms
• B)$3,679 in real terms
• C)$3,870 in nominal terms
• D)$8,062 in nominal terms FV = $1,000(1.11)²⁰
• = 1,000 (8.06231)
• = 8,062.31
• FV = $1,000(1.04)²⁰
• = 1,000(2.19112)

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Definitions:

Tastes

Sensory experiences produced by substances in the mouth interacting with taste receptors on the tongue.

Aqueous Humor

A clear, watery fluid in the eye, located between the cornea and the lens, helping to maintain intraocular pressure and provide nutrients to the eye.

Pressure

The force exerted per unit area; in a fluid, it is often due to the weight of the fluid above and is measured in units such as Pascals or pounds per square inch.

Glaucoma

A group of eye conditions that lead to damage to the optic nerve, often associated with increased pressure in the eye, resulting in loss of vision if not treated.