Assume you have $10,000 to invest in a bull market (currently 4/2021) and you now
want to diversify your portfolio between risky stocks (Technology) and conservative
bonds (Treasuries, AAA Companies) (kime, clark, michael explorations in college algebra
5th edition, page 174)
The bonds will stay at a fixed value and return 7% guaranteed, while the stocks are more
volatile and historically return 14% per year.
Suppose you require a 12% return or $1,200 on your investment of $10,000 at end of
year; "How much to invest Bonds (B) and how much to invest in Stocks (s)? Overall, you
require a 12% or $1,200 return on your $10,000 investment?
B + S = 10,000
cmsv_final_project_with_solution_04 2721.docx
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5/9/21