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Suppose an investor placed $5 million into each of two investment funds at the beginning of 1970. All investment earnings were reinvested. One fund invested
Suppose an investor placed $5 million into each of two investment funds at the beginning of 1970. All investment earnings were reinvested. One fund invested in commercial real estate and produced a performance like that portrayed for real estate in Exhibit 7-8. The other fund invested in common stocks and produced a performance like that indicated for the stock market in Exhibit 78. a. How much did the investor have in each of the two funds at the end of 1989 ? b. What was the real purchasing power in each of the two funds, measured in dollars of 1969 purchasing power? c. Now repeat your answers to (a) and (b) only assuming the initial $5 million investment was made at the beginning of 1989 until 2010 and use 1989 dollars as the measure of constant purchasing power. d. Why was 1986 a significant year for the income-property sector
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