You have $5000 to invest for 1 year.  Fund A has an estimated 4% annual return, and Fund B has an estimated 10% annual return.  Fund A is more stable, and preferred among investors with low risk tolerance.  Fund B is less stable, but has larger returns. Answer the following questions about this investment opportunity.   Suppose you have a high risk-tolerance, and you invest everything in Fund B.  How much do you expect to make on your investment? $                      .  Round to the nearest cent

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ISBN:9780470458365
Author:Erwin Kreyszig
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Investment Analysis

You have $5000 to invest for 1 year.  Fund A has an estimated 4% annual return, and Fund B has an estimated 10% annual return. 

Fund A is more stable, and preferred among investors with low risk tolerance.  Fund B is less stable, but has larger returns.

Answer the following questions about this investment opportunity.

 

Suppose you have a high risk-tolerance, and you invest everything in Fund B.  How much do you expect to make on your investment?

$                      .  Round to the nearest cent.

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You have $5000 to invest for 1 year.  Fund A has an estimated 4% annual return, and Fund B has an estimated 10% annual return. 

Fund A is more stable, and preferred among investors with low risk tolerance.  Fund B is less stable, but has larger returns.

Answer the following questions about this investment opportunity.

1. Suppose you have a low risk-tolerance, and you invest everything in Fund A.  How much do you expect to make on your investment?
Round to the nearest cent.

2. Suppose you have a medium risk-tolerance, and you want an annual return of $355.  You decide to invest part in Fund A and the rest in Fund B.  How much do you need to invest in Fund A?

 

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