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Cognitive Reflection Test

I found the following three questions from an article in the April 2006 issue of Smartmoney rather interesting:

1) A bat and a ball cost $1.10 in total. The bat costs $1 more than the ball. How much does the ball cost?

2) If it takes five machines five minutes to make five widgets, how long would it take 100 machines to make 100 widgets?

3) In a lake, there is a patch of lily pads. Every day, the patch doubles in size. If it takes 48 days for the patch to cover the entire lake, how long would it take for the patch to cover half the lake?

Each question has an intuitive — but wrong — answer. See if you are ‘tricked’ by your intuition. 😉

PS. The answers are given in the Comments.

Fidelity 529 college rewards credit card

2006-03-27-fidelity529card.gifI received the Fidelity 529 college rewards credit card earlier this month. I think for parents setting up a 529 College Plan, this credit card offers a fantastic deal and it is one of the rare credit cards that gives you 2% back on practically anything you charge to the card. In addition, it also offers you online Bill Payment service which lets you pay many merchants including even your mortgage or electric bill, companies that traditionally do not accept credit cards. Although for these payments no reward points are earned, you can still benefit by enjoying the additional float on the money that you otherwise would have to pay earlier.

I just hope that MBNA would not pull the plug on this card after the recent merger with Bank of America.

Should I add commodities to my portfolio?

The big debate of the benefits of adding CCF (collateralized commodities futures) funds to a portfolio continues on the Diehards forum (48981). As for myself, I had previously bought PCRIX as part of my Precious Metal / Commodity asset class allocation but decided to eliminate it due to difficulties in re-balancing and performing DCA (PCRIX is a transaction-fee fund at VBS). I replaced it with VGPMX instead.

The new ETF DBC sounds interesting but I would defer any consideration until the expense ratio is lowered to at least below 0.8%.