You have $5000 to invest for 1 year.  Fund A has an estimated 4% annual return, and Fund B has an estimated 10% annual return.  Fund A is more stable, and preferred among investors with low risk tolerance.  Fund B is less stable, but has larger returns. Answer the following questions about this investment opportunity. Suppose you have a low risk-tolerance, and you invest everything in Fund A.  How much do you expect to make on your investment?

College Algebra
1st Edition
ISBN:9781938168383
Author:Jay Abramson
Publisher:Jay Abramson
Chapter9: Sequences, Probability And Counting Theory
Section9.7: Probability
Problem 60SE: Use this data for the exercises that follow: In 2013, there were roughly 317 million citizens in the...
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Investment Analysis

You have $5000 to invest for 1 year.  Fund A has an estimated 4% annual return, and Fund B has an estimated 10% annual return. 

Fund A is more stable, and preferred among investors with low risk tolerance.  Fund B is less stable, but has larger returns.

Answer the following questions about this investment opportunity.

Suppose you have a low risk-tolerance, and you invest everything in Fund A.  How much do you expect to make on your investment?

$                      .  Round to the nearest cent.

 

Thanks!!!!

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