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The investor will notice that the return on the two investments is different, as the return on the investment fund is 10% (500 ÷ 5000 = 0.1 or 10%), while the return on investment in the company’s stock is only 2% (500 ÷ 25000 = 0.02 or 2%). It should be noted that it is not correct to rely entirely on comparing returns only when making an investment decision.
6 months ago
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