Jump to content


Welcome to BrainDen.com - Brain Teasers Forum

Welcome to BrainDen.com - Brain Teasers Forum. Like most online communities you must register to post in our community, but don't worry this is a simple free process. To be a part of BrainDen Forums you may create a new account or sign in if you already have an account.
As a member you could start new topics, reply to others, subscribe to topics/forums to get automatic updates, get your own profile and make new friends.

Of course, you can also enjoy our collection of amazing optical illusions and cool math games.

If you like our site, you may support us by simply clicking Google "+1" or Facebook "Like" buttons at the top.
If you have a website, we would appreciate a little link to BrainDen.

Thanks and enjoy the Den :-)
Guest Message by DevFuse
 

Photo
- - - - -

Investment Problem


  • Please log in to reply
4 replies to this topic

#1 superprismatic

superprismatic

    Not just Prismatic

  • Moderator
  • PipPipPipPip
  • 1281 posts
  • Gender:Male

Posted 23 January 2012 - 09:58 PM

Once in a while, one sees a column with a mathematical bent in a newspaper. More often than not, there's
something that doesn't seem quite right about it. In the Chicago Tribune column found here,
a claim is made that you could have purchased 10-year bonds with a 3% rate at the beginning of 2011,
sold them at the end of 2011 (when similar 10-year bonds had a 2% rate), and made a profit of around
16% on your original investment. Can anyone offer any mathematical justification for this claim?
  • 0

#2 dyalDragon

dyalDragon

    devious Drake

  • Members
  • PipPipPipPip
  • 1747 posts
  • Gender:Male

Posted 23 January 2012 - 10:56 PM

I can get a 15.4% profit, but I'm not sure I'm attacking the problem right.... I'm a H&W actuary, not Investment :D
  • 0

#3 curr3nt

curr3nt

    The

  • Members
  • PipPipPipPip
  • 2839 posts
  • Gender:Male
  • Location:in a field of spatulas...

Posted 23 January 2012 - 10:57 PM

Spoiler for I'm not sure...

  • 0

#4 dyalDragon

dyalDragon

    devious Drake

  • Members
  • PipPipPipPip
  • 1747 posts
  • Gender:Male

Posted 23 January 2012 - 11:01 PM

Spoiler for thoughts

  • 0

#5 plasmid

plasmid

    Senior Lolcat

  • VIP
  • PipPipPipPip
  • 1305 posts
  • Gender:Male

Posted 24 January 2012 - 05:04 AM

I think curr3nt and dD are essentially right, they're just omitting a bit of a fudge factor in the article -- it mentions bonds at the beginning of the year selling for "a little over 3 percent" and at the end of the year "just under 2 percent", and they may very well be rounding the return up to 16% from an actual value just over 15.5%.

And all of that makes much more sense than the real estate market around here.
  • 0




0 user(s) are reading this topic

0 members, 0 guests, 0 anonymous users