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1. Investing excess cash is better than keeping it under the mattress or in a checking account because inflation will cause cash to lose purchasing power over time. In the example given, a tall mocha that cost $1.85 in 2005 would cost $4.42 today due to inflation of 5.6% annually. 2. Assets that provide returns, such as stocks, tend to preserve and potentially increase purchasing power better than cash due to their appreciation over the long run. However, assets with higher expected returns also tend to h

Author

Mohamed Rajiv Asha

Language

EN