Problemas
Mauritius received a bonus check from his employer and wants to put it aside to use for a down payment on a house that he hopes to buy in 7 years. What would be a good place for Mauritius to put his money in, knowing his timeline for this goal? Choose 1 answer: A CDs (certificate of deposit) B stocks or bonds C a bank account
Roztwór
Araceli
élite · Tutor durante 8 años
4.4
(238 Votos)
Respuesta
The best place for Mauritius to put his money is 'A', CDs (Certificate of Deposit).
Explicación
## Step 1The problem is about choosing the best investment option for Mauritius, who wants to save money for a down payment on a house in 7 years. The options provided are CDs (Certificate of Deposit), stocks or bonds, and a bank account.## Step 2CDs (Certificate of Deposit) are a type of financial product commonly offered to consumers who are looking to save money over a long term. They are considered a safe investment because they are insured by the FDIC up to certain limits and they offer a fixed interest rate over a specified period of time.## Step 3Stocks and bonds, on the other hand, are more volatile investments. They can offer higher returns, but they also come with higher risks. The value of stocks and bonds can fluctuate based on market conditions, and there is a risk of losing the principal amount invested.## Step 4A bank account is a safe place to store money, but it typically does not offer significant interest. Therefore, it is not the best option for someone looking to save money for a long-term goal like a down payment on a house.## Step 5Considering the above factors, the best option for Mauritius would be to invest in CDs. They offer a fixed interest rate over a specified period of time, which makes them a good choice for someone looking to save money for a long-term goal.