Use the following information for Questions 21 23. q21. Jeremy Siegels books, The Future for Investors
Question:
Use the following information for Questions 21 – 23.
q21. Jeremy Siegel’s books, “The Future for Investors” and “Stocks for the Long Run” illustrate some long-term data on returns in both the stock and the bond market. Siegel tells us that, over the period from 1802 – 2005, the long run average real return in the US equity market is 6.8% and it is 3.5% in the bond market. Based on Siegel’s data, answer the following three questions.
If a relative invested $700 in the equity market in 1802 and allowed it to grow at 6.8% for the next 230 years, how much would the investment be worth in 2032?
Multiple Choice
$2,152,247,542
$2,524,457,255
$2,650,695,857
$2,609,072,572
q22.
Jeremy Siegel’s books, “The Future for Investors” and “Stocks for the Long Run” illustrate some long-term data on returns in both the stock and the bond market. Siegel tells us that, over the period from 1802 – 2005, the long run average real return in the US equity market is 6.8% and it is 3.5% in the bond market. Based on Siegel’s data, answer the following three questions.
If a relative invested $700 in the bond market in 1802 and allowed it to grow at 3.5% for the next 230 years, how much would the investment be worth in 2032?
Multiple Choice
$1,547,345
$1,323,675
$1,725,547
$1,911,518
Q23. Based on Siegel’s data, with long (30 year) holding periods, which of the following asset classes has the smallest risk, as measured by standard deviation?
Multiple Choice
Bonds
Treasury Bills
It is impossible to know
Common stock
Horngrens Financial and Managerial Accounting
ISBN: 978-0133866292
5th edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura