People who might need to retrieve part or all of their investment relatively soon, such as the elderly, are often advised to invest a higher percentage of their money in bonds, and thus a lower percentage in stocks, than people who can leave the investment untouched for decades. We know, however, that bonds typically have a lower rate of return than stocks.

Why would people be advised to invest in assets that give lower average rates of return?
a. This is bad advice. People should always invest in whichever assets have the highest average rate of return.
b. Although stocks have a higher rate of return in the long run, they are much more volatile, or riskier, in the short run. Therefore, there is a higher probability that the value of the stocks will be less than the original value of the investment for people who might need to withdraw the investment in the short run.
c. Since bondholders get paid before stockholders in the event of bankruptcy of a firm, the average "real" rate of return on stocks and bonds will be the same, with bonds being less risky.
d. Although stocks have higher average rates of return in the long run, bonds have higher average rates of return in the short run. Therefore, bonds are likely to be more profitable for people who might need to get their investment back in the short run.

Answers

Answer 1

Answer:

b. Although stocks have a higher rate of return in the long run, they are much more volatile, or riskier, in the short run. Therefore, there is a higher probability that the value of the stocks will be less than the original value of the investment for people who might need to withdraw the investment in the short run.

Explanation:

The relationship between risk and return plays an important role here. Although stocks have higher returns on average, they are much riskier. One way in which this higher risk can manifest itself is through a portfolio value that fluctuates a lot. So, it is more likely that $1,000 invested in a diversified stock portfolio will be worth only $800 at some point than $1,000 invested in a diversified bond portfolio. If the investor is going to need that $1,000 back at some point soon, then it might be wiser to invest in the lower‑average‑return bond portfolio.

Stocks surely have higher rate of return in the long run but are highly volatile in the short run. If an investor, especially older person, who might need his money in the short run may find that his current value of stock is less than the value of investment. Thus the investor may incur a net loss even if the stock may have high rate of retun in the long run. Hence it is advisable to invest more in bonds if money is to be withdrawn in the short run.


Related Questions

How does human, natural, and capital resources help the home and community run smoothly​

Answers

Answer:

Human resources: Refer to the human effort needed for the production of goods and services, and societies and economies need human resources to advance. These resources often include skilled and unskilled labor. Entrepreneurial and management skills are also human resources and refer to the ability to start and run economic activities.

Natural resources: Are elements and materials that have formed without any human action. They exist in nature, and people might take them and use them in their natural form or as raw materials for producing all types of objects. These resources can be renewable, like water, sunlight, wind and trees, or non-renewable, like fossil fuels, gold, iron, clay and other minerals. Capital resources: Include money to start a new business, tools, buildings, machinery, and any other goods people make to produce goods and provide services

Explanation:

Human capital and economic growth have a strong correlation. Human capital affects economic growth and can help to develop an economy by expanding the knowledge and skills of its people.

Human capital refers to the knowledge, skill sets, and experience that workers have in an economy. The skills provide economic value since a knowledgeable workforce can lead to increased productivity. The concept of human capital is the realization that not everyone has the same skill sets or knowledge. Also, the quality of work can be improved by investing in people's education.

What Drives Economic Growth

Economic growth is an increase in an economy's ability, compared to past periods, to produce goods and services. Economic growth is measured by the change in the gross domestic product (GDP) of a country. GDP is a representation of the total output of goods and services for an economy.

Mohandas Gandhi helped India win independence through __________.
a: fighting
b: communism
c: nonviolent protests
d: industrialization

Answers

Answer:

non- violent protests

Explanation:

gandhi ji come india and start satyagrah against British and he want to democratic country as india


The doctrine that holds the view that historical circumstances are determined by a sequence of economic events
connected to the act of production is known as ............
O A. Economic determinism
O B. Historical materialism
11 a 0
O C. Rationalization
O D. Economic materialism

Answers

B historical materialism

what service does a financial institution offer to help you track your money?

Answers

Financial Institutions would offer credit cards and checking account services to track money

Answer:

Credit cards

Explanation:

What is one way political parties shape public policy?​

Answers

Answer:

"Helping elected officials who belong to the party work together more effectively."

Explanation:

sorry found this, and ur questions been up awhile. sorry

Sophie
Sophie is 25 and has been married for two years. She tells her mother that she is
growing apart from her husband. He works long hours and they don't do anything
together. Sophie feels she should go back to school - at least she had fun there.
As her mother, you respond by saying:
A. You're angry with him and you feel cheated because you think he's keeping you
from having fun. It seems like you really miss that.
B. Your husband is working hard to pay the bills; he's probably just too tired to do
anything else.
C. You've been married for only two years; maybe things will get better after a
while

Answers

Answer: Your husband is working hard to pay bills; he's probably just too tired to do anything else.

Explanation: Working can become very stressful and can sometimes be very overwhelming for an individual. Stress creates exhaustion and that oftentimes can lead to becoming mentally and physically drained.

Suppose that an economy consists of only two individuals. Jeremy has $1890 available to spend on goods. He decides to purchase $390 worth of produce from Krista in the current quarter. No other economic activity takes place during the current quarter. Using this information, answer the questions.

For the current quarter, what is the economy's income? $_____________
For the current quarter, what is the economy's expenditure? $_____________

In an economy, how are income and expenditure related?
a. Income is less than expenditure.
b. They are equal.
c. They are unrelated.
d. Income is greater than expenditure.

Answers

Answer:

Economy's income: $390

Economy's expenditure: $390

b. They are equal.

Explanation:

In an economy Income (Y) is the sum of Consumption or private expenditure (C), Investment (I), Government spending (G), and Net Exports (NX).

Y = C + I + G + NX

But as the economy consists only of 2 individuals, Investment (I), Government spending (G), and Net Exports (NX) are Zero. Therefore,

Y = C i.e. Income = Expenditure

In the above scenario, Jeremy spends $390 on produce from Krista. Jeremy's expenditure is equal to Krista's income which is $390. Under the assumptions in this scenario, the sum of all spending that occurs in the economy is exactly equal to the sum of all income that people receive.

In the question, Krista receives $390 in income from selling her produce to Jeremy. The $390 that Jeremy paid for the produce is the amount of expenditure for the economy. The $1890 Jeremy could have used is irrelevant since it is not used in the current quarter. The expenditure a buyer pays for a good or service is equal to the income the seller receives.

The aggregate demand and aggregate supply (AD‑AS) model shown depicts a hypothetical situation where a recent increase in expected income increases AD. The current AD (post adjustment) is depicted by curve AD1.

Please show what will happen to this economy next (ceteris paribus). Adjust only one of the curves in one direction. The original AD curve cannot be shifted.

Answers

Answer:

*see image*

Explanation:

The correct answer in this question is to shift the short‑run aggregate supply (SRAS) curve to the left. The new SRAS curve should meet with the AD1 curve and the long‑run aggregate supply (LRAS) curve all at the same point. The SRAS curve should not shift to the left farther than that.

In this example, the increase in expected income increased aggregate demand. The key to this problem is understanding that at the original AD curve, the economy was already at a long‑run, full employment equilibrium. So, this increase in expected income has increased output above the full employment level. After increase in aggregate demand (AD), the AD curve has shifted rightward to AD1, increasing both aggregate output and price level in short run.

This higher output is only temporary. It comes with increased prices, so workers and suppliers adjust their expectations to the higher price level. This decreases short‑run aggregate supply and shifts the SRAS curve to the left. The economy readjusts at the same full employment level of output, but at a much higher level of prices. Higher price level increases the cost of inputs, therefore raising production cost which makes firms reduce production and output. As a result, aggregate supply falls, shifting SRAS curve leftward to SRAS1, intersecting AD1 at the original aggregate output (potential GDP), but at a further higher price level as shown below.

The short-run aggregate supply (SRAS) curve should be moved to the left as the answer to this query. The long-run aggregate supply (LRAS) curve and the new SRAS curve should intersect at the same position. Beyond that, the SRAS curve shouldn't go further to the left.

In this instance, the rise in anticipated income raised total demand. The solution to this issue lies in realizing that the economy was already at a long-run, full employment equilibrium at the time of the original AD curve. As a result, output has increased above the threshold of full employment due to this increase in projected income.

After a rise in aggregate demand, the AD curve shifted rightward to AD1, which in the short term increased aggregate output and price level.

What is Aggregate Supply?

The aggregate supply (AS) or domestic final supply in economics refers to the entire amount of products and services that organizations in a national economy hope to sell over a timeframe.

It is the overall value of goods and services that companies in an economy are willing and able to supply for sale at a certain price point.

What is Aggregate Demand?

The overall demand for final goods and services in an economy at a certain period is known as aggregate demand (AD) or domestic final demand (DFD) in the field of macroeconomics.

Effective demand is a common name for it, however other times this term is used to make a distinction.

This is a country's demand for its gross domestic output. It details the volume of goods and services that will be bought at every price point. The aggregate demand is made up of investment, business and government expenditures, consumer spending, and net exports.

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Please answer
Question 3 (1 point)
What can we learn about the Etowah people from the mounds they created?
they created a town center, a place for religious activities and burial grounds
they lived in Texas.
they still have the same town
they did not see European explorers

Answers

Answer:

They had a hierarchical social structure.

Explanation:

The flattened mound was used for the chief's house, meaning that the chief was elevated as somebody more important than the rest of the villagers.

Question 5 of 10
The main purpose of the Health Insurance Marketplace is to help people:
A. assess their insurance risks.
B. increase their insurance deductibles.
C. find health insurance plans,
D. extend their health insurance coverage.

Answers

The main purpose of the Health Insurance Marketplace is to help people find health insurance plans.

What is the purpose of Health Insurance Marketplace?

It is a service that helps people shop for and enroll in health insurance matters that affect them.

The Health Insurance Marketplace is a resource where individuals, families, and small businesses can:

Compare health insurance plans for coverage and affordability.Get answers to questions about your health care insurance.Enroll in a health insurance plan that meets your needs.

Hence, the main purpose of the Health Insurance Marketplace is to help people find health insurance plans.

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Answer: find health insurance plans

Explanation: because

How would you define Jefferson's idea of government?​

Answers

Answer:

A strict constructionist

.What is the system of how money is made and used within a particular country or region called?
(Please help quickly I'm on the exam and I need the answer fast because I need to move on to more assignments!!!)


A. Technology


B. Government


C. Economics


D. Production


(Please take time making the answer because I don't want it to be wrong)

Answers

Economics (A) is the answer

What was the lifestyle of the Incas like? That is, how did the Incas live in South America?

Answers

Answer:

The Incas in their way of life, lived in huts made of stone and straw, which only had one room and no windows. The walls are painted in bright colors.

#CarryOnLearning

⇒ I hope I have helped you, greetings!

Atte: ||°Miraculer18°||

Answer:

Daily life in the Inca empire was characterised by strong family relationships, agricultural labour, sometimes enforced state or military service for males, and occasional lighter moments of festivities to celebrate important life events in the community and highlights in the agricultural calendar.

4 differences an 4 similarities between welfare capitalism an classical liberalism

Answers

The differences that exists between welfare capitalism and classical liberalism is that:

Welfare capitalism is directed towards the employers of labor while classical liberalism is directed towards the government.free market principles are mixed together with laws from a welfare state in welfare capitalism, while classical liberalism is about the limitation of the powers of the goverment.Classical liberalism is concerned with the protection of freedoms of citizens, welfare capitalism is mostly about the market.

What is classical liberalism?

This is a market system that is mostly about the laissez faire system in an economy. It is one that advocates for free markets.

What is the welfare capitalism in a country?

This is one that involves businesses and firms providing welfare services to the people that they employ.

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During the Constitutional Convention, small states did not want their representation based on
Which scenario is not guaranteed under the Articles of Confederation?

Answers

Answer:

a merchant

Explanation:

they can always use the same currency in Connecticut and Georgia

All the planets in our solar system have more or less the same–

Answers

Answer:

As Morbidelli notes, most planetary scientists agree that the planets in our solar system had similar origins as small rocks orbiting the sun, comprising the protoplanetary disk, which collided and fused, creating increasingly larger rocks that eventually became protoplanets.

Explanation:

Answer:

except for pluto

Explanation:

In 2006 pluto was named a dwarf planet and is now forced to sit at the kids table during planet thanksgiving

business plan for bakery

Answers

[tex] \mathbb\blue{Refer\:to\:attachments\:for\:sample}[/tex]

[tex]\mathbb\blue{of\:a\:bakery\:business\:plan} [/tex]

I can see it when social studies has been done but I don’t think you can do it

Answers

what do you mean, do what? are you trying to do something on a website

Explain how speciation occurs and provide some examples

Answers

Answer:

The definition of speciation is the formation of new species throught the course of evolution. There are many different ways it can occur.

Geographic Isolation - Seperating two species, so that they are in different habitats. Over time these species get acquainted to heir habitats and start evolving to fit in it. Suppose there is a big lake where a species of fish lives, and the lake gets seperated. One side of the lake prefers dark fish and the other prefers lighter fish. On one side, dark fish becomes more prevalent and light fish becomes more prevalent on the ohter side. Soon, this species will split into two species, based on how different they are on the color of their scales.Temporal Isolation - This is when species mate a different times of the year. One example is if you have a bunch of frogs. Most of them mate in the summer. All of a sudden, some of them mate in the Spring as well. Soon these frogs mate a different times and become different species as they don't mate at the same time. The frogs that mate at differnt times can no longer, be the same species.Behavioral - This is when species have different mating calls or courthsips. Lets say you have birds that sing a specific tune to mate and then one day, another group fo birds in the same species sing a different tune. Soon, these two bird species will be different as they sing different tunes and can no longer mate with each other. If they can't mate with each other, they are no longer the same species.

(Close Reading) What evidence does it use to support its claims? Document A: Blog Post

Answers

The Evidence serves as help for the grounds provided and supports obligate gatherings to accept assertions.

What is a Blog Post?

A blog post is any article, news story, or guide that is published on a website's blog area. Evidence backs up the arguments made and makes it easier for people to believe them.

Evidence comes in a variety of forms, and it varies from one academic topic or debate to the next.

Therefore, blog post support the evidence of claims.

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How youth could use social media to encourage their peers to become responsible citizens​

Answers

Answer:

Youth could use social media to encourage their peers to become responsible citizens by posting helpful tips or videos. Also, they could post how they are getting affected by these in a positive way.

The short-run macroeconomic model is very similar to the standard model for markets. In what ways are these two models similar?

Answers

Answer:

Explanation:

Slope of demand curve is negative and slope of supply curve is positive in both the models.

But labeling of axis is different in both the models. In the short-run macroeconomic model, y-axis represents the price level whereas x-axis represents the GDP.

While in the standard model for markets, y-axis shows the general price level whereas x-axis represents the output level.

Compare and contrast land which has undergone desertification to ecosystems which harbor natural deserts. How can the apparently life-promoting act of irrigation eventually have the opposite effect?

Answers

A natural desert refers to an ecosystem which is a large and dry land area which has little to no vegetation.

What is Desertification?

This refers to the gradual process of land turning into a desert due to several factors.

Hence, we can see that irrigation can help to slow down or even reverse the effects of desertification of a piece of land, but also planting of trees is needed in order to keep a place from turning to a desert.

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The graph characterizes a market for loanable funds. Shift the appropriate curves to indicate what will happen to the market if there is an improvement in the technology firms use in production.

After this change,
a. the real interest rate increases and the quantity of loanable funds decreases.
b. the real interest rate decreases and the quantity of loanable funds increases.
c. the real interest rate increases and the quantity of loanable funds increases.
d. the real interest rate decreases and the quantity of loanable funds decreases.

Answers

Answer:

c. the real interest rate increases and the quantity of loanable funds increases.

Explanation:

If there is improvement in the technology firms use in production then they need money. So they borrow more, because of this borrowing the demand curve will shift right.

As the demand curve shifts right it is clearly visible that from y-axis the real interest rate increases as the equilibrium shifts right due to shift in demand curve. From x-axis it is clear that quantity of loanable funds increases.

In the market here, there is an improvement in the technology firms use in production. In response to this change, borrowers will want to borrow more money at all interest rates. Firms have a greater incentive to borrow money because doing so has become more profitable. The change here should be modeled as an increase in demand for loanable funds.

To determine the impact on the interest rate and equilibrium quantity of loanable funds, identify the new intersection of the supply and demand curves. An increase in demand for loanable funds causes both the real interest rate and the equilibrium of loanable funds to rise.

By supporting with practical examples, how would you argue out with statement that, “perception in most cases are subjective, irrational and marred with errors”.

Answers

Perception in most cases is subjective, irrational, and marred with error. Examples to support the notion are given below:

Some individuals argue that atoms don't exist because they are not visibleSome argue that there is no God because He is not visibleSome argue that there is no carbon monoxide in a room and even if there is, it cannot be smelt.

What is Perception?

Perception is a careful organization, identification, and interpretation of information in order to understand the presented information. It is what an individual thinks or feels about a piece of information or something else.

Some perceptions can be filled with flaws and in most cases are subjective and irrational. Even though on the surface it might feel like its true but it is actually the opposite.

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1. If you had to pick just one would you call yourself a boy, man, girl, woman, gender non-binary child or gender non-binary adult?



2. If you identified yourself as a boy, girl or gender non-binary child; when will you become a man, woman or gender non-binary adult?



Or

If you identified yourself as a man, woman or gender non-binary adult; when did you become a man, woman or gender non-binary adult?

Answers

Answer:

1 woman 2 just was destined to be 3 when I was born

Suppose that the U.S. concrete industry has developed an inexpensive way to make concrete both lighter and stronger. As a result, the full employment level of aggregate output has grown from level A to level B in the graph. Move the SRAS (short‑run aggregate supply), AD (aggregate demand), or LRAS (long‑run aggregate supply) curves to describe how this concrete technology innovation has affected the U.S. economy.

Answers

Answer:

*see image*

Explanation:

The full‑employment level of aggregate output has grown from level A to level B. As such, LRAS shifts to the right from level A to level B.

An advance in technology equates with an increase in productivity. As a result, it increases the economy's ability to produce goods and services. In this case, better concrete lowers the cost of buildings, roads, and sidewalks. Consequently, the long‑run aggregate‑supply curve shifts to the right. It may help to think about being able to produce more buildings for the same amount of money.

Since most people may not even notice a difference in the concrete, the aggregate demand stays constant (i.e., does not shift).

Suppose that the government changes the tax code to allow additional amounts of money to be placed in 401(k) retirement accounts, increasing the extent to which people can delay their tax obligations. Show the effect by shifting the appropriate curve in the market for loanable funds.

Answers

Answer:

*see image*

Explanation:

As the tax obligation has been delayed and people can now park more in their 401K accounts this will cause the supply of loanable funds to increase and cause the supply curve to shift rightwards and this causes a fall in the interest rates.

The new law that is described will result in an increase in the supply of loanable funds, meaning that the supply curve should shift to the right.

In this case, the supply curve shows how the amount of money that savers are willing to loan varies with the interest rate. Making more money eligible for the tax benefits that are associated with 401(k) retirement accounts will induce higher levels of saving, which will lead to more funds being available.

Define is peace building

Answers

Answer:

Peacebuilding is an activity that aims to resolve injustice in nonviolent ways and to transform the cultural and structural conditions that generate deadly or destructive conflict.

Which of these documents is created by each state? ASAP


Constitution

Declaration of Independence

Articles of Confederation

State of the Union

Answers

The documents created by each state is the Constitution as it contains all of the governing principles of the state.

The Constitution: as a guide for governance

A constitution by definition is an aggregate of fundamental principles or established precedents that constitute the legal basis of a polity, organisation or other type of entity and commonly determines how such entity in discuss is to be governed.

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A possible consequence of oversharing online might be:A. receiving a great recommendation from a teacher.B. getting accepted to the college of your choice.C. stealing information from friends you do not trust.D. being incriminated against or fired by an employer. Expand & simplify4(2p+2)+6(2p3) Which event represents an example of social media being used in anemergency situation?A. The spread of information regarding climate changeO B. The spread of video footage showing a man's murder by a policeofficer in 2020C. The political protests held in several Arab countries in the early2010sD. Communication with friends and family after other systems weredisabled by a major earthquake For the most part, collision rates steadily.A. decline as age increases.B. increase as age increases.C. stay level as age increases. Why do some countries have independence before others?3 marks answer Select ALL of the expressions that are equivalent to 45.A. 220B. 6^1/2-5^1/2c. 3*5^1/2+5^1/2D.4*5^1/2E.210F.3*5^1/2 You are writing an essay on the use of the archetype of the 'evil woman in the films of Christopher Nolan (whodirected the Batman-Dark Knight trilogy), and you need concrete facts. Which is a concrete fact you could use in your essay and not an abstract assertion?A)Nolan's films are known for being not only incredibly dramatic, but alsotechnically impressive. B)Some critics believe that Nolan tends to write "evil' female characters whooften betray the male hero. C)In Nolan's films critics have often noticed that he includes both strongmasculine and feminine characters. D)In Nolan's third Batman film, the role of the "evil woman" is played byMiranda who ends up betraying and stabbing Batman. ASAP Pllease Giving 20 points how to find the area of a circle Find the value of y. Please help me with Part C of this question What type of climate is characteristic of temperate grassland biomes?Select one:Seasonal shifts in temperature and variation in amounts of precipitationLow temperatures at high altitudes and large amounts of precipitationLow temperatures and low amounts of precipitationOHigh temperatures and large amounts of precipitation 4/10If Sara has a mass of 60 kg and lives on the fifth floor of herapartment 18 m above the ground, then what is hergravitational potential energy?Use g=9.81 m/s2 for the acceleration due to gravity. this really hard for me so if you could leave a explanation that would be great. A baker mixes 8\frac{3}{4}8 43 cups of white flour with 2\frac{1}{2}2 21 cups of rye flour for a bread recipe.How many cups of white flour does the baker mix for every 11 cup of rye flour? FIND THE AREA OF THE FIGURE BELOW The great distance from America made it difficult for _____ to govern the colonies. Which of the following q values satisfies: 6-3q1Q=0Q=1=Q=2 2. Define nebular hypothesis." What evidence is there that life exists on Mars andis most likely "older" than life on Earth? what is the area of a rectangle that has a length of 4.5 centimeters and width of 3.25 centimeters? use the formula A=l*w