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Chapter 4: Managing Your MoneyAssignment #3 – Unit 4CSavings Plans and InvestmentsPages 246 – 264What is a savings plan? Explain the savings plan formula.Give an example of a situation in which you might want to solve the savings plan formula to find payments, PMT, required to achieve some goal.Distinguish between the total return and the annual return on an investment. How do you calculate the annual return? Give an example.Briefly describe the three basic types of investments: stocks, bonds, and cash. How can you invest in these types directly? How can you invest indirectly through a mutual fund?Explain what we mean by an investment’s liquidity, risk, and return. How are risk and return usually related?Contrast the historical returns for different types of investments. How do financial indices, such as the DJIA, help keep track of historical returns?Define the face value, coupon rate, and maturity date of a bond. What does it mean to buy a bond at a premium? At a discount? How can you calculate the current yield of a bond?Briefly describe the meaning of each column in a typical financial table for stocks and mutual funds.Exercises: Pages 265 – 268 Problems 19 - 92 ................
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