4
QuizMultiple Choice

Stocks and Bonds

Question 4 • 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. If you buy five of the XYZ bonds with $8 commission for each, how much will it cost?

Question illustration
Answer
A
$5025
B
$5065
C
$1005
D
$1045
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