cody has invested $12,000 total. he has invested $3,000 in stocks, $2,000 in a certificate of deposit, and…

cody has invested $12,000 total. he has invested $3,000 in stocks, $2,000 in a certificate of deposit, and $5,000 in government bonds. cody’s stocks are currently performing poorly. he has purchased $2,000 worth of an automotive company’s stock, and its value has steadily dropped over the last year. he is reluctant to sell the stock because he is worried about how much money he has already invested. which investment practice is cody following? which investment shortcoming has he failed to avoid? focusing on sunk costs which step should cody take to improve his investment portfolio? sell the failing stock if cody sold all his stocks and put the total amount in an account with 5% interest, in how many years would his money double? about 14 years

cody has invested $12,000 total. he has invested $3,000 in stocks, $2,000 in a certificate of deposit, and $5,000 in government bonds. cody’s stocks are currently performing poorly. he has purchased $2,000 worth of an automotive company’s stock, and its value has steadily dropped over the last year. he is reluctant to sell the stock because he is worried about how much money he has already invested. which investment practice is cody following? which investment shortcoming has he failed to avoid? focusing on sunk costs which step should cody take to improve his investment portfolio? sell the failing stock if cody sold all his stocks and put the total amount in an account with 5% interest, in how many years would his money double? about 14 years

Answer

Explanation:

Step1: Identify investment practice

Cody invests in stocks, certificate - of - deposit, and government bonds. This is diversification as he spreads his investment across different asset classes.

Step2: Analyze investment shortcoming

He is reluctant to sell the poorly - performing stock due to the money already invested, which is focusing on sunk costs.

Step3: Determine improvement step

Selling the failing stock can free up capital and reduce losses, so he should sell the failing stock.

Step4: Calculate doubling time

We use the rule of 70. The formula for the rule of 70 to find the time $t$ it takes for an investment to double at an annual interest rate $r$ (in percentage) is $t=\frac{70}{r}$. Given $r = 5$, then $t=\frac{70}{5}=14$ years.

Answer:

Which investment practice is Cody following? Diversification Which investment shortcoming has he failed to avoid? Focusing on sunk costs Which step should Cody take to improve his investment portfolio? Sell the failing stock If Cody sold all his stocks and put the total amount in an account with 5% interest, in how many years would his money double? About 14 years