8.Decide whether the following statement makes sense(or is clearlytrue) or does not make sense(or is clearlyfalse). Explain your reasoning.

I'm putting all my savings into stocks because stocks always outperform other types of investments over the long term.

Choose the correct answer below.

A.

The statement does make sense because stocks are alow-risk investment, offering predictable low returns.

B.

The statement does not make sense because although stocks historically outperform bonds and cash over the longterm, investing in stocks ishigh-risk and there is no guarantee that the investment will yield a high return.

C.

The statement does make sense because stocks historically outperform bonds and cash over the long term and investing in stocks ishigh-risk, which offers higher returns.

D.

The statement does not make sense because stocks never outperform bonds and cash over the long term.

9.

Find the savings plan balance after 4 years with an APR of 9% and monthly payments of $300.

The balance is $_____

(Do not round until the final answer. Then round to the nearest cent asneeded.)

10.

Find the savings plan balance after 9 months with an APR of 4% and monthly payments of $300.

The balance is $______

(Do not round until the final answer. Then round to the nearest cent asneeded.)

11.Calculate the current yield on the described bond.

A $2000 Treasury bond with a coupon rate of 2.7% that has a market value of $1725

The current yield is _____% (Round to two decimal places asneeded.)

12.You want to purchase a new car in 7 years and expect the car to cost $69,000. Your bank offers a plan with a guaranteed APR of 6.5% if you make regular monthly deposits. How much should you deposit each month to end up with $69,000 in 7 years?

You should invest $_____ each month.

(Round the final answer to the nearest cent as needed. Round all intermediate values to seven decimal places asneeded.)

13.Calculate the annual interest that you will receive on the described bond.

A $1000 Treasury bond with a current yield of 4.9% that is quoted at 106 points

The annual interest is $_____(Round to the nearest cent asneeded.)

14.

Compute the total and annual return on the following investment.

Two years after paying $2500 for shares in a startupcompany, you sell the shares for $1100 (at aloss).

The total return is _____%

(Do not round until the final answer. Then round to the nearest tenth asneeded.)

The annual return is _____%

(Do not round until the final answer. Then round to the nearest tenth asneeded.)