22. You and a friend were having a discussion about what rate of return would be required for your investment to double in 10 years. (a) Calculate what rate of return using simple interest would be required for an investment to double in 10 years. (Hint: Assume an investment of $1000) (3 marks) (b) Calculate what rate of return using compound interest would be required for an investment to double in 10 years. (Hint: Assume an investment of $1000) (3 marks) (c) Explain why your answer to i) and ii) is the same or different?

21. Explain the role of superannuation and explain why superannuation funds under management have exploded since 1992 and become the largest part of the managed funds industry. (4 marks) (b) Outline and justify which (superannuation) fund (based on investment risk profile) a person with the lowest propensity to take risk and separately a person with the highest propensity to take risk should invest in and why. (4 marks)

20.

Parties who have bought a futures contract are said to have taken a __ position and parties who have sold a futures contract are said to have taken a __ position.

sell; short

buy; short

short; long

long; short