BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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4
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10
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5.5
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There is not enough information to answer this question.
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Detailed explanation-1: -To make money in stocks, you must protect the money you have. Live to invest another day by following this simple rule: Always sell a stock it if falls 7%-8% below what you paid for it.
Detailed explanation-2: -With an estimated annual return of 7%, you’d divide 72 by 7 to see that your investment will double every 10.29 years. In this equation, “T” is the time for the investment to double, “ln” is the natural log function, and “r” is the compounded interest rate.
Detailed explanation-3: -At 10%, you could double your initial investment every seven years (72 divided by 10). In a less-risky investment such as bonds, which have averaged a return of about 5% to 6% over the same time period, you could expect to double your money in about 12 years (72 divided by 6).
Detailed explanation-4: -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.