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You have become concerned that you have too much of your money invested in your pizza restaurant and have decided to diversify your personal portfolio.
- You have become concerned that you have too much of your money invested in your pizza restaurant and have decided to diversify your personal portfolio. Right now the pizza restaurant is your only investment. To diversify, you plan to sell 45 percent of your restaurant and invest the proceeds from the sale, in equal proportions, into stock and a bond. Over the next year, you expect to earn a return of 15 percent on your remaining investment in the pizza restaurant, 12 percent on your investment in the stock, and 8 percent on your investment in the bond. What return will you expect from your diversified portfolio over the next year?
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