Question

Assignment Details

Assume that you were given $100,000 to invest in financial assets.

• What would your investment portfolio look like?
• Why?

Answer 1

As a young investor and an investor with a high risk appetite i would choose that a greater allocation of wealth in my portfolio is made towards stock investments and a small portion of my investments is made towards bonds. As bonds provide a fixed and stable returns but the returns provided by stocks is higher in comparison to the bonds as well as the risk assoiated with it , is higher. I would allocate a 60% of the wealth in my portfolio towards stocks and the remaining towards bonds that is 20% , a 10% of my wealth would be cash and cash equivalents for meeting my immediate cash requirements 10% in my bank deposits to earn a fixed rate of interest on banks deposits which is safe investment.