A saving bonds pay 3% annual real rate of return compounded daily. Professor John Jones invest $40 biweekly as part of his University payroll program. IF the inflation rate is assumed to be 2% per year over the next 10 years, what is the purchasing power of the power of the professor's bonds 10 years from now
Risk and return
Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.
Capital Asset Pricing Model
Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
A saving bonds pay 3% annual real
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