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You have a portfolio totalling RM219,000 and want to invest in municipal bonds, blue-chips stocks or speculative stocks. The municipal bonds pays pay 6% annually. Over a five-year period, you expect blue-chips stock to return 10% annually and growth stocks to return 15% annually. You want a combined annual return of 8% and you also want to have only one- fourth of the portfolio invested in stocks. How much should be allocated to each type of investment?

You have a portfolio totalling RM219,000 and want to invest in municipal bonds, blue-chips stocks or speculative stocks. The municipal bonds pays pay 6% annually. Over a five-year period, you expect blue-chips stock to return 10% annually and growth stocks to return 15% annually. You want a combined annual return of 8% and you also want to have only one- fourth of the portfolio invested in stocks. How much should be allocated to each type of investment?

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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You have a portfolio totalling RM219,000 and want to invest in municipal bonds, blue-chips stocks or speculative stocks. The municipal bonds pays pay 6% annually. Over a five-year period, you expect blue-chips stock to return 10% annually and growth stocks to return 15% annually. You want a combined annual return of 8% and you also want to have only one- fourth of the portfolio invested in stocks. How much should be allocated to each type of investment?
Transcribed Image Text:You have a portfolio totalling RM219,000 and want to invest in municipal bonds, blue-chips stocks or speculative stocks. The municipal bonds pays pay 6% annually. Over a five-year period, you expect blue-chips stock to return 10% annually and growth stocks to return 15% annually. You want a combined annual return of 8% and you also want to have only one- fourth of the portfolio invested in stocks. How much should be allocated to each type of investment?
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