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ement and her comfort with investm allocate the money in her retirement account as follows: 75% to equities, 20% assumes that each asset class earns the low end of the historical average rates return would she expect to earn over the long term? ● . . Equities: 8% -12% Fixed Income: 4% - 7% Cash: 2% - 5% O 6.90% O 5.60% O 10.65%

ement and her comfort with investm allocate the money in her retirement account as follows: 75% to equities, 20% assumes that each asset class earns the low end of the historical average rates return would she expect to earn over the long term? ● . . Equities: 8% -12% Fixed Income: 4% - 7% Cash: 2% - 5% O 6.90% O 5.60% O 10.65%

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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On the basis of how long she has until retirement and her comfort with investment risk, Chelsea has decided that she wants to allocate the money in her retirement account as follows: 75% to equities, 20% to fixed income, and 5% to cash. If Chelsea assumes that each asset class earns the low end of the historical average rates of return provided below, what overall rate of return would she expect to earn over the long term? Equities: 8%-12% Fixed Income: 4% - 7% . Cash: 2% - 5% . O 6.90% O 5.60% O 10.65% O 7.75% 4.67%
Transcribed Image Text:On the basis of how long she has until retirement and her comfort with investment risk, Chelsea has decided that she wants to allocate the money in her retirement account as follows: 75% to equities, 20% to fixed income, and 5% to cash. If Chelsea assumes that each asset class earns the low end of the historical average rates of return provided below, what overall rate of return would she expect to earn over the long term? Equities: 8%-12% Fixed Income: 4% - 7% . Cash: 2% - 5% . O 6.90% O 5.60% O 10.65% O 7.75% 4.67%
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