David is wanting to grow his money is considering three investment projects which are known as Investment A, Investment B, and Investment C. Each investment requires an initial purchase of $10,000. Investment A offers an expected rate of return of 12%, Investment B a return of 5%, and Investment C of 10%. David wants to make the investment and decides that he will cash in a Certificate of Deposit that is currently earning 7% return. Which investment should David NOT purchase because he would lose money? A) Investment A B) Investment B C) Investment C D) Neither Investment

The correct answer is letter B

Investment is the application of some type of resource (money or bonds) with the expectation of receiving some future return higher than that applied, including the loss of use of this resource during the application period (interest or profits, in general, in the long term).

On investment B he would not be able to make money since the return would be 5% and he would need 7%.

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