(a) Why should Victor and Maria consider buying common stock as an investment with the additional money?...

Question:

(a) Why should Victor and Maria consider buying as an investment with the additional money?
(b) If Victor and Maria bought a stock with a market price of $50 and a beta value of 1.8, what would be the likely price of an $8000 investment after one year if the general market for rose 6 percent?
(c) What would the same investment be worth if the general market for dropped 8 percent?

Victor and Maria have decided to increase their contribution to their investment since Victor is now age 59 and thinking about retiring in five years. For years, they have followed a moderate-risk investment philosophy and put their money in suitable bonds, and mutual funds. The value of their is now $320,000, and this is in addition to their paid-for rental property, which is worth $200,000. They plan to invest about $9000 every year for the next five years.

Common Stock
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