For Exercises 3.1 to 3.4, see page 124; for 3.5, see page 126; for 3.6, see page 126; and for 3.7 and 3.8, see page 127.
3.2 Should you invest in stocks?
You have just accepted a new job and are offered several options for your retirement account. One of these invests about 75% of your employer’s contribution in stocks. You talk to a friend who joined the company several years ago who said that after he chose that option, the value of the stocks decreased substantially. He strongly recommended that you choose a different option. Comment on the value of your friend’s advice.