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Unformatted text preview: 3. I would say this is an externality market failure at least for fund B, because we do not know the long term benefit of the interest rate. It can be really high one day, and then take an ugly turn, which would cause a loss in investment. So overall, I would put a little bit in A and be careful on the amount I put in B so I don’t lose all my money in that fund....
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This document was uploaded on 11/01/2011 for the course ECO 201 at Miami University.
- Fall '08