Victor and Maria are considering making investments in stocks and bonds. They plan to invest between $8000 and $9000 every year for the next 13 years.

(a) Why should Victor and Maria consider buying common stock as an investment?

(b) If Victor and Maria bought a stock with a market price of $50 and a beta value of 1.8, what would be the likely price of an $8000 investment after one year if the general market for stocks rose 10 percent?

(c) What would the same investment be worth if the general market for stocks dropped 10 percent?