Marcus recently saw the increase in the price of GameStop stock and decided to buy $200...

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Marcus recently saw the increase in the price of GameStop stock and decided to buy $200 of stock. Previously he was considering using that money to buy a government bond that paid 1% interest per year for 8 years. 1. Marcus posted on all social media accounts that everyone should buy this stock since the prices keep going up. Comment on his post and explain to him how diversifying and compound interest can help him reach his long term goals for investing. 2. Marcus comments that the bond is also risky because it is paying a risk-premium of 1%. Explain if he is correct or not with this assumption. 3. If Marcus had purchased the bond, how much would he have at the end of the 8 years? Marcus recently saw the increase in the price of GameStop stock and decided to buy $200 of stock. Previously he was considering using that money to buy a government bond that paid 1% interest per year for 8 years. 1. Marcus posted on all social media accounts that everyone should buy this stock since the prices keep going up. Comment on his post and explain to him how diversifying and compound interest can help him reach his long term goals for investing. 2. Marcus comments that the bond is also risky because it is paying a risk-premium of 1%. Explain if he is correct or not with this assumption. 3. If Marcus had purchased the bond, how much would he have at the end of the 8 years?

Answer rating: 100% (QA)

1 It is quite risky to put all our money in simply one stock Doing so can result in the loss of all ... View the full answer