Juan is a small$-$business owner. He has some cash flow and wants to invest in a new project. Juan$$s assistant provides an evaluation and estimates the nominal returns that Juan would earn if he invests in the project. Juan reads the evaluation and makes the decision based on the real terms after factoring in inflation.

Good Financial Decision?

Yes

No

The technology boom in the late $1990$s enticed everyone. Wilson is an average investor, and he invested all his money in technology stocks.

Good Financial Decision?

Yes

No

Mr$.$ and Mrs$.$ Smith are in the middle of their investment planning, so they hire a financial planner. In their discussions with the financial planner, they include their investment timeline and the length of time that they can keep investing. This helps Mr$.$ and Mrs$.$ Smith come up with an investment objective and a financial plan.

Good Financial Decision?

Yes

No