Question

1. What is the average annual return if someone invested 100% in bonds.

2. What is the average annual return if someone invested 100% in stocks

3. Calculate the range of potential annual returns if you invested 10% in bonds and 90% in stocks. How does this compare with the range of potential annual returns if you invested 10% in stocks and 90% bonds

4. Your friend tells you he is going to start investing and would like to earn a 10% return. He says stocks make him nervous, so he will only be investing 10% in stocks and the remaining 90% will be invested in bonds. What would you say to him?

5. Use evidence from this graph to explain the value of investing in both stocks and bonds- not just one or the other

Answer 1

Based on the graph given on bond and stock returns, the average return if one invested 100% in bonds or in stocks is 5.0% and 9.2% respectively.

What happens if you invest 100% in either stocks or bonds?

The graph shows that when you invest a 100% in bonds, the average return you stand to make it 5.0% while the worst return is -2.1%.

If you invest a 100% in stocks however, you stand to make an average of 9.2% but a chance of a worst return of -40.40%.

Find out more on investing in bonds at https://brainly.com/question/25536432.

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