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Investment Class Average Return Small Stocks 17% Large Stocks 12% Long-Term Corporate Bonds 7% Long-Term Government Bonds 6% US Treasury Bills 3% Money Market 1%

Investment Class

Average Return

Small Stocks

17%

Large Stocks

12%

Long-Term Corporate Bonds

7%

Long-Term Government Bonds

6%

US Treasury Bills

3%

Money Market

1%

1. Janet just got engaged and is now saving money for her wedding. She has $1,000 and can save a maximum of $200 per month. They want to get married in about a year. For this investment horizon what type of investment would you recommend?

Use the table below to find out what the wedding budget should be.

N

I/Y

PV

PMT

FV

2. Mark has decided to start saving for retirement. He has 15 years until retirement and would like to retire a millionaire. His advisor has told him that he should invest 50% in large company stocks and 50% in long-term corporate bonds. How much does he need to invest each month to retire with $1,000,000.

N

I/Y

PV

PMT

FV

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