Question
1) Answer the following questions about risk, return and the time value of money a) How much will Bill have if he invests $25,000 for
1) Answer the following questions about risk, return and the time value of money
a) How much will Bill have if he invests $25,000 for 3 years at a rate of 4.4% pa with interest paid and compounded quarterly?
b) Explain the relationship between interest rates and future value (and present value)
c) Discuss at least two (2) sources of investment risk.
d) Discuss the three (3) approaches that can be used to determine an individuals overall risk profile.
e) What is meant by the term risk premium and what influence does this have on the investment decision.
(only short responses required)
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