In responding to these two posts, identify and discuss one risk involved with these two posts’ decisions. Provide one argument to convince these two posts to make the other choice.
I also post the original questions as the references. Each comments should be around 50-100 words. Thanks.
Assume you have $12,000 in cash. You can deposit it today in a mutual fund earning 8.2% semiannually, or you can wait, enjoy some of it, and invest $11,000 in your brother’s business in two years. Your brother is promising you a return of at least 10% on your investment. Regardless of the investment option you choose, you will have to cash in at the end of 10 years. Assume your brother is trustworthy and that both investments carry the same risk. Which investment option will you choose and why? Justify your answer using time value of money calculations and concepts.