Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Are iconic sports cars a better bet than the stock market? You do the math by comparing the return on investment for the S&P 500

Are iconic sports cars a better bet than the stock market? You do the math by comparing the return on investment for the S&P 500 from 1963 to the present (2024) to the return on investment from 1963 to the present (2024) for several iconic sports cars. The following table provides the basis for comparisons Investment S&P 500 Jaguar EType Shelby Cobra 260 Porsche 356A Corvette Stingray Split Window Ferrari 250 GTO Cost or amount invested in 1963 $100 $5,895 $5,995 $4,408 $4,257 $18,000 Value (or estimated value) in 2024 $42,216 $149,500 $650,000 $99,500 $139,000 $51,700,000 Compound annual return on investment? Compound monthly return on investment? A) Calculate the compound annual and compound monthly return on investment for the S&P 500 and these iconic sports cars. (6 points) B) Clearly, the Ferrari 250 GTO would have been a great investment. How much would the current value of the Ferrari need to fall to (i.e., need to be) in order for the rate of return on investing in the Ferrari in 1963 to match the rate of return for investing in the S&P 500? (4 points)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting principles and analysis

Authors: Terry d. Warfield, jerry j. weygandt, Donald e. kieso

2nd Edition

471737933, 978-0471737933

More Books

Students also viewed these Accounting questions

Question

Quadrilateral EFGH is a kite. Find mG. E H Answered: 1 week ago

Answered: 1 week ago