20
QuizMultiple Choice

Stocks and Bonds

Question 20 • LVA - Mathematical Modeling - Spring

Your current CD matures in a few days. You would like to find an investment with a higher rate of return than the CD. Stocks historically have a rate of return between 10% and 12%, but you do not like the risk involved. You have been looking at bond listings in the newspaper. A friend wants you to look at the following corporate bonds as a possible investment. What is the annual interest you would earn on each bond?

Question illustration
Answer
A
ABC 128; XYZ 17
B
ABC 7.5; XYZ 8.4
C
ABC 104; XYZ 100
D
ABC 7; XYZ 7
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