P = Po + Po*r*t.
P = 10000 + 10000*0.09*5 = $14,500. =
Value after 5 years.
4. a. Someone in the 36 percent tax bracket can earn 9 percent annually on her investments
in a tax-exempt IRA account. What will be the value of a one-time $10,000 investment
in 5 years? 10 years? 20 years?
b. Suppose the preceding 9 percent return is taxable rather than tax-deferred and the taxes
are paid annually. What will be the after-tax value of her $10,000 investment after 5, 10,
and 20 years?
2 answers
You have a fairly large portfolio of U.S. stocks and bonds. You meet a financial planner at a
social gathering who suggests that you diversify your portfolio by investing in emerging market
stocks. Discuss whether the correlation results in Exhibit 3.10 support this suggestion
social gathering who suggests that you diversify your portfolio by investing in emerging market
stocks. Discuss whether the correlation results in Exhibit 3.10 support this suggestion
0 answers