Question
1)You have 250 000 TL to invest. The first option is to buy a government bond for a year. At the end of one year,
1)You have 250 000 TL to invest. The first option is to buy a government bond for a year. At the end of one year, you will have 305 000 TL net in your account. The second option is to invest in a corporate bond that has 1 year maturity. The simple yield of this corporate bond is %30. The third alternative is to buy a common stock at the current price of 5.60 TL and the market forecasts a fundamental price of 7.84 TL per share for one year. Which option would you invest and why? If you construct a portfolio of 3 assets mentioned above, that is investing 100 000 TL to government bond, 80 000 TL to corporate bond and the rest to common stock, calculate the expected rate of return of your portfolio.
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