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# ASSET MARKETS 3. Suppose Adam, Ben and Carl each received an inheritance of \$200,000 and each used it immediately to purchase a house. Each person...

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ASSET MARKETS 3. Suppose Adam, Ben and Carl each received an inheritance of
\$200,000 and each used it immediately to purchase a house.
Each person sold his house after 1 year. Economic conditions
were different in each case. ' During the time Adam owned the house, there was 25%
deflation. A year after Adam bought the house, he sold it
for \$154,000 (23% less than what he had paid). ' During the time Ben owned the house, there was no
inflation or deflation. Ayear after Ben bought the house,
he sold it for \$198,000 (1% less than what he had paid). ' During the time that Carl owned the house, there was a
25% inflation. A year after Carl bought the house, he sold it
for \$246,000 (23% than what he had paid). Please rank Adam, Ben and Carl in terms of the success of their
housing transactions. Assign “1 ” to the person who made the
best deal, and “3” to the person who made the worst deal.

Ranking Person Explanation 1 Carl Carl sells his investment at the right market conditions. This is because he probably sold... View the full answer

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