Nicole Nelson has come into an inheritance from her grandparents. She is attempting to decide among several investment alternatives. The return after one year is dependent primarily on the interest rate during the next year. The rate is currently 7%, and she anticipates it will stay the same or go up or down by at most 2 points. The various investment alternatives plus their returns ($10,000s) given the interest rate changes are shown in the following table.
Investments
Interest Rates
5%
6%
7%
8%
9%
Money market fund
1.7
2.8
3.0
3.6
4.5
Stock growth fund
-5
-3
3.5
5
7.5
Bond fund
5
4
3.5
3
2
Government fund
4
