Question
Elizabeth received inheritance from grandparents of $24,000 when she was 3 years old which was invested in stocks and placed in a trust account. She
Elizabeth received inheritance from grandparents of $24,000 when she was 3 years old which was invested in stocks and placed in a trust account. She is 18 years old now and has received $100,000 from the trust account into her bank account.
a)
Calculate the average annualized return on the trust fund investments.
Answer
b) The trustee instead of investing in stocks, could have purchased when Elizabeth was 3 years old, a Government of Canada strip bond, yielding 6.0% maturing when Elizabeth would be 18.
Explain if Elizabeth would have received more money with the stock market investments or the Government of Canada strip bond.
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