The Rule of 72 is a simple way to determine how long an investment will take to double given a fixed annual rate of interest By dividing 72 by the annual rate of return, investors obtain a rough estimate of how many years it will take for the initial investment to duplicate itself You want to double your initial investment of $5,000 You put your money in a high yield interest bearing account earning 6 per year How long will it take to double your money a)10 years b)12 years c)25 years d)33 years You graph some investment options on a cartesian graph with risk on the y axis and return on the x axis If you draw a best fit line, you would expect it to a)Be horizontal b)Be vertical c)Be downward sloping (negative slope) d)Be upward sloping (positive slope) The variance of a series of numbers is the sum of the squares of their differences from the mean (average) of the numbers divided by the number of items in the series Variance is a common measure of risk What is the variance of these investment returns 10, 30, 20 a)0 b)66 7 c)100 d)200 Assume risk and return are positively related Which algebraic formula best represents this relationship a)Risk m x Return where m is negative b)Risk m x Return where m is zero c)Risk m x Return where m is positive What is the value of a $1,000 investment that loses 5 each year for 8 years a)$181 98 b)$234 88 c)$663 42 d)$864 62 You bought 100 shares of stock at $15 per share You sold your 100 shares at $21 75 per share Calculate your percentage of gain a)18 b)21 c)31 d)45 You invest $3,000 You have speculated that you will earn an average of 7 on your initial investment each year What do you expect the total value to be in ten years a)$3,268 b)$5,901 c)$6,134 d)$11,546 You bought 100 shares of stock at $15 per share You sold your 100 shares at $21 75 per share Calculate your total profit from the sale a)$217 b)$675 c)$855 d)$1,150 Calculate the Rate of Return on an initial investment of $6,000 valued at $6,500 a)4 3 b)6 5 c)8 3 d)9 5 Stock is priced at $85 per share and pays a quarterly dividend of $2 10 per share What is the dividend yield per stock share per year a)2 8 b)3 5 c)9 9 d)11 3

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The Rule of 72 is a simple way to determine how long an investment will take to double given a fixed annual rate of interest.

The Rule of 72 is a simple way to determine how long an investment will take to double given a fixed annual rate of interest. By dividing 72 by the annual rate of return, investors obtain a rough estimate of how many years it will take for the initial investment to duplicate itself. You want to double your initial investment of $5,000. You put your money in a high yield interest-bearing account earning 6% per year. How long will it take to double your money? a)10 years b)12 years c)25 years d)33 years
You graph some investment options on a cartesian graph with risk on the y axis and return on the x-axis. If you draw a best-fit line, you would expect it to a)Be horizontal b)Be vertical c)Be downward sloping (negative slope) d)Be upward sloping (positive slope)
The variance of a series of numbers is the sum of the squares of their differences from the mean (average) of the numbers divided by the number of items in the series. Variance is a common measure of risk. What is the variance of these investment returns? 10, 30, 20 a)0 b)66.7 c)100 d)200
Assume risk and return are positively related. Which algebraic formula best represents this relationship? a)Risk = m x Return where m is negative b)Risk = m x Return where m is zero c)Risk = m x Return where m is positive
What is the value of a $1,000 investment that loses 5% each year for 8 years? a)$181.98 b)$234.88 c)$663.42 d)$864.62
You bought 100 shares of stock at $15 per share. You sold your 100 shares at $21.75 per share. Calculate your percentage of gain. a)18% b)21% c)31% d)45%
You invest $3,000. You have speculated that you will earn an average of 7% on your initial investment each year. What do you expect the total value to be in ten years? a)$3,268 b)$5,901 c)$6,134 d)$11,546
You bought 100 shares of stock at $15 per share. You sold your 100 shares at $21.75 per share. Calculate your total profit from the sale. a)$217 b)$675 c)$855 d)$1,150
Calculate the Rate of Return on an initial investment of $6,000 valued at $6,500. a)4.3% b)6.5% c)8.3% d)9.5%
Stock is priced at $85 per share and pays a quarterly dividend of $2.10 per share. What is the dividend yield per stock share per year? a)2.8% b)3.5% c)9.9% d)11.3%