Greg wins $1,000 in a radio contest. He decides to invest his windfall into a bond that has a yield of 3% simple interest for 1.5 years. The inflation rate for the year has been around 3%. Greg does not need to access the money right away and is considering a long-term investment. Is the bond a wise investment for Greg? Why or why not? Using the table above and your knowledge of the types of investments, which option or options would you recommend for Greg?
The bond is not a wise choice for Greg to invest in because it has more risks. The best option that I would recommend for Greg to invest in is the Certificates of Deposit which has very low rates of risks and it guarantees the profit. The more the investment stays the more the profit.