You are shopping around to determine which bank account yields the highest return. You have three choices: 1st - Wesbanco offers an account compounded semi-annually at 3.99% 2nd - PNC offers an account compounded annually at 3.89% 3rd - United offers an account compounded daily at 3.82% You have $2,200 to invest for 2 years. Which account should you choose to have the best return on your investment?
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.
You are shopping around to determine which bank account yields the highest return.
You have three choices:
1st - Wesbanco offers an account compounded semi-annually at 3.99%
2nd - PNC offers an account compounded annually at 3.89%
3rd - United offers an account compounded daily at 3.82%
You have $2,200 to invest for 2 years. Which account should you choose to have the best
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