Question: You invest 1 000 in a stock and 1 000 in a
You invest $1,000 in a stock and $1,000 in a corporate bond. If you earn 10 percent on the stock and 6 percent on the bond and hold each security for 20 years, what are the terminal values for each investment? If you continue to hold each security and earn the same returns for 30 years, how much more will the stock generate than the bond over the entire time period? (When you invest for retirement, you should think about the answer to this problem.)
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