Suppose randy jones plans to invest $1,000. he can earn an effective annual rate of 5% on security a, while security b has an effective annual rate of 12%. after 11 years, the compounded value of security b should be somewhat less than twice the compounded value of security a. (ignore risk, and assume that compounding occurs annually.)

Secured loans are protected by collateral security. examples: title loans where the borrower uses the car title as collateral security interest rates are lower and repayments are longer therefore risk is low as a collateral security is given as guarantee to the bank in case of failure to pay the loanunsecured loans are not protected by collateral security but it is given on the creditworthiness of the borrower, trusting that she/he will pay on time. examples; payday loans is a short term loan where the borrower lends money from the bank and pays is back when the borrower receives his/her wages.interest rates are high and repayments are shorter. but the risk is high as no collateral security is given as a guarantee to the bank for payment of the loan

The correct answer is  "b)  net income overstated, assets unaffected, liabilities understated, and owner's equity overstated."