The Rate of Return Earned on an Investment of $50,000

question 26

Multiple Choice

The rate of return earned on an investment of $50,000 today that guarantees an annuity of $10,489 for six years in approximately:

• A) 5 percent
• B) 7 percent
• C) 30 percent
• D) 10 percent
• E) 12 percent

Understand and define the concept of mutually exclusive events in probability.

Understand and define the concept of independent events in probability.

Calculate the probability of the intersection of two events.

Calculate the conditional probability of one event given another.

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Definitions:

Held-To-Maturity

A categorization for investments in fixed income securities that the investor intends and is able to hold until the date of maturity.

Fair Value Method

An accounting approach used to assess and report the value of certain assets and liabilities at their current market prices.

Cost Method

An accounting approach used to value inventory or investments based on the original purchase cost, without adjusting for market changes.

Foreign Exchange Rates

The value at which one currency can be exchanged for another.