Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A person who is 30 years old has been given the following asset allocation: 5% 20% 40% Growth Growth and income Equity Incoma/Balanced 20% Bond
A person who is 30 years old has been given the following asset allocation: 5% 20% 40% Growth Growth and income Equity Incoma/Balanced 20% Bond 35% It is suggested that 40% of the assets be invested in growth investments, which is most likely small company stocks and possibly international company stocks that do not pay a dividend but are focused on growing. Next it is suggested that 35% of the assets be invested in Growth-and- income, which is most likely dividend paying stocks for companies that are still growing, such as Nike. Third, it is suggested that another 20% be invested in equity- income/balanced investments such as dividend paying stocks, mutual funds invested in dividend paying stocks and/or corporate bonds (which pay interest.) Last, 5% is suggested for bonds, most likely corporate bonds but could also include government, agency, or municipal bonds. Question: Explain the risk level of this portfolio. Would you say this is a conservative portfolio or an aggressive portfolio? Why? What assets in the portfolio bring safety and which bring more risk
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started