Stephanix Carter has been gifled a sum of $50,000 by her ganxiparents on compieting her gaduation successfilly. She is a fresh france gaduate and is excited to invest sone moncy in the capial market, for which she itends to use the gitted sum of 550,000 . However, instead of conmiting this moncy to the market imnediately, she decides to wat for some time, work in the fiell and acquire some experience before proceeding with her intended investment. Ste thus conteriphtes an extremely conservative investment in a pontiols of stocks and bonds, at the start of year 5 from now. For now, she will kave the $50,000 in a fined deposit with the bank which promikes an itterest rate of 6% per annam She will require a retum of at kast 9% on her stock investments and 4% on bond imestments. Stephanic would have to pay 25% taxes on any merest income. Devidends will be tax-fice. Stephanie's research has alowed her to narrow down on the Gollowing ivestinent candidates: Stephanie wants her portfolio to be distributed approximately 595 between stocks and bonds such that around 5%(3%) of her investable funds are allocated to stocks and 95%(3%) to bonds. Her investment criteria further specify that: i. For all stocks priced below $50,100 shares each of such stocks be purchased and for stocks priced above S50,50 shares each should be purchased. ii. 100 units of each acceptable bonds be purchased. 8. Given that Stephunie's bank offers an interest rate of 6% per year, what addeional amount should she have deposited as a fived deposit in the bank so as to accumulate the amount needed for her inestment in stocks and bonds when necded? (2 marks) 9. Suppose Stephanie deposited the $50,000 in a fived deposi. For the shortitl she thought of purchasing a 5-year ordinary anraity that pays an increst rate of 3.5% per annum what annal deposit will be required to cover the shortail? ( 2 marks) 10. Which of the two options would you reconmend for covering the shontill (Choose between the options in questions 8 and 9 above). Support you response with sulable conmitation Stephanix Carter has been gifled a sum of $50,000 by her ganxiparents on compieting her gaduation successfilly. She is a fresh france gaduate and is excited to invest sone moncy in the capial market, for which she itends to use the gitted sum of 550,000 . However, instead of conmiting this moncy to the market imnediately, she decides to wat for some time, work in the fiell and acquire some experience before proceeding with her intended investment. Ste thus conteriphtes an extremely conservative investment in a pontiols of stocks and bonds, at the start of year 5 from now. For now, she will kave the $50,000 in a fined deposit with the bank which promikes an itterest rate of 6% per annam She will require a retum of at kast 9% on her stock investments and 4% on bond imestments. Stephanic would have to pay 25% taxes on any merest income. Devidends will be tax-fice. Stephanie's research has alowed her to narrow down on the Gollowing ivestinent candidates: Stephanie wants her portfolio to be distributed approximately 595 between stocks and bonds such that around 5%(3%) of her investable funds are allocated to stocks and 95%(3%) to bonds. Her investment criteria further specify that: i. For all stocks priced below $50,100 shares each of such stocks be purchased and for stocks priced above S50,50 shares each should be purchased. ii. 100 units of each acceptable bonds be purchased. 8. Given that Stephunie's bank offers an interest rate of 6% per year, what addeional amount should she have deposited as a fived deposit in the bank so as to accumulate the amount needed for her inestment in stocks and bonds when necded? (2 marks) 9. Suppose Stephanie deposited the $50,000 in a fived deposi. For the shortitl she thought of purchasing a 5-year ordinary anraity that pays an increst rate of 3.5% per annum what annal deposit will be required to cover the shortail? ( 2 marks) 10. Which of the two options would you reconmend for covering the shontill (Choose between the options in questions 8 and 9 above). Support you response with sulable conmitation
