Because stock indexes offer higher returns than bonds historically, the rule of 70 implies that we should invest:
A) in bonds.
B) in stock indexes.
C) half in stock indexes and half in bonds.
D) in neither stocks nor bonds.

Question

Quizplus · Accepted Answer

The rule of 70 states that you can approximate the time it takes for an investment to double in value by dividing 70 by the expected annual rate of return. Since stock indexes historically offer higher returns than bonds, investing in stock indexes would likely yield higher returns and a shorter time to double your investment. Therefore, option B is the best choice.

Because Stock Indexes Offer Higher Returns Than Bonds Historically, the Rule