Question
Ben has just purchased a long-term government bond and expects to make a 7% return. Donna has just purchased a stock in a new start-up
Ben has just purchased a long-term government bond and expects to make a 7% return. Donna has just purchased a stock in a new start-up company but expects to make a 20% return. Why is Donna expecting a higher return? Which investment is riskier over time? Which investment is more vulnerable to sudden changes in the economy?
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Get StartedRecommended Textbook for
Multinational financial management
Authors: Alan c. Shapiro
10th edition
9781118801161, 1118572386, 1118801164, 978-1118572382
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