1. In your role as a financial advisor, youre advising a client, Sally, a 30-year old computer programmer who makes an above-average salary. Shes investing money in her 401(k) that she doesnt plan to use until retirement. In your opinion, which of the two portfolios above would be most appropriate for these funds? In your answer, explain why you believe the portfolio youve chosen is appropriate and explain why the portfolio you didnt choose is not appropriate.

\begin{tabular}{|c|l|} \hline \multicolumn{2}{|c|}{ Portfolio 1 } \\ \hline \multicolumn{1}{|c|}{ Asset Category } & Percentage of Portfolio \\ \hline U.S. small-company stocks & 5 \\ \hline U.S. large-company stocks & 10 \\ \hline International stocks & 5 \\ \hline U.S. government bonds & 50 \\ \hline U.S. corporate bonds & 30 \\ \hline \hline \multicolumn{2}{|c|}{ Portfolio 2} \\ \hline \multicolumn{1}{|c|}{ Asset Category } & Percentage of Portfolio \\ \hline U.S. small-company stocks & 20 \\ \hline U.S. large-company stocks & 30 \\ \hline International stocks & 25 \\ \hline U.S. government bonds & 15 \\ \hline U.S. corporate bonds & 10 \\ \hline \end{tabular}