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Investment Year 1 1 Year 2 Year 3 Year 4 Year 5 Total A B $ 1,200 $ 400 $ 5,000 800 (4,000) 3,200 1,500
Investment Year 1 1 Year 2 Year 3 Year 4 Year 5 Total A B $ 1,200 $ 400 $ 5,000 800 (4,000) 3,200 1,500 5,600 1,000 3,300 (4,000) 600 3,200 12,000 200 $ 10,000 $10,000 $ 10,000 Required: A. Assuming that the investments will be held for 5 years and then sold, provide a short discussion of which of the three has more value if the differences in risk are ignored. B. Assuming that the investments will be held for 5 years and then sold, provide a short discussion of which of the three has the least value if risk is taken into account. Investment Year 1 1 Year 2 Year 3 Year 4 Year 5 Total A B $ 1,200 $ 400 $ 5,000 800 (4,000) 3,200 1,500 5,600 1,000 3,300 (4,000) 600 3,200 12,000 200 $ 10,000 $10,000 $ 10,000 Required: A. Assuming that the investments will be held for 5 years and then sold, provide a short discussion of which of the three has more value if the differences in risk are ignored. B. Assuming that the investments will be held for 5 years and then sold, provide a short discussion of which of the three has the least value if risk is taken into account
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