Mr. Wong aged 50 is planning to retire after 10 years. Currently, he has total savings of $3 million. He is thinking about which of the following investment plans is the best for his selection.

10-year time deposit with annual interest rate 3%.

Buy a new apartment worth $3 million. He believes that he can earn rental fee of $10,000 per month by renting out the apartment. He will deposit the annual rental income to the bank at the end of each year. Besides, he thinks the value of the apartment will worth $3.5 million after 10 years.

To set up an investment portfolio which consists of 40% investment in Bond, and the rest of the savings to be invested in stock. Detail information of the portfolio will be as follow:

10-year Bond: Face value $1,000, the current selling price is $1,000 per bond and the annual coupon of the bond is $60.

Stock: Current selling price is $2,000 per share. The expected annual dividend is $7 per share and the expected market price of the stock after 10 years will be $3,200 per share.

The required annual return by Mr. Wong is 3% (compounded annually).

Suppose all the current income earned from investment will be deposited into the bank and may earn 3% annual interest rate.

Required:

(1)	For each of the investment options, how much will he have after 10 years? (detail workings must be shown)	(25 marks)
(2)	Analyze each of the investment options and determine which one do you suggest Mr. Wong to invest.	(10 marks)