Ashlie wants to invest $2000 and is considering using half to buy Tesla stock and the other half to buy a government bond. The future value of the stock is uncertain, but she expects it to go up by 15% per year. The bond has a guaranteed rate of 1% per year. a). Explain how splitting her investment between the stock and bond affects her risk and return from this investment. b). Is it possible for Ashlie to make a risk-free investment? c). How much will Ashlie earn on her bond investment if she leaves the money in for 20 years?
Ashlie wants to invest $2000 and is considering using half to buy Tesla stock and the other half to buy a government bond. The future value of the stock is uncertain, but she expects it to go up by 15% per year. The bond has a guaranteed rate of 1% per year. a). Explain how splitting her investment between the stock and bond affects her risk and return from this investment. b). Is it possible for Ashlie to make a risk-free investment? c). How much will Ashlie earn on her bond investment if she leaves the money in for 20 years?
Algebra and Trigonometry (6th Edition)
6th Edition
ISBN:9780134463216
Author:Robert F. Blitzer
Publisher:Robert F. Blitzer
ChapterP: Prerequisites: Fundamental Concepts Of Algebra
Section: Chapter Questions
Problem 1MCCP: In Exercises 1-25, simplify the given expression or perform the indicated operation (and simplify,...
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Ashlie wants to invest $2000 and is considering using half to buy Tesla stock and the other half to buy a government bond. The future value of the stock is uncertain, but she expects it to go up by 15% per year. The bond has a guaranteed rate of 1% per year.
a). Explain how splitting her investment between the stock and bond affects her risk and return from this investment.
b). Is it possible for Ashlie to make a risk-free investment?
c). How much will Ashlie earn on her bond investment if she leaves the money in for 20 years?
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