Student __________________________ Student # ___________________<\/p>\n
This is a weighted average concept problem.<\/p>\n
The smart investor knows that he should not put all his \u201ceggs in one basket\u201d. In this Prof. Dallis has placed a sum of money (you need to determine how much) into three different \u201cbaskets\u201d each earning a different interest rate.<\/p>\n
We did a problem like this in class and for homework. This is very similar, the big difference is the investor has chosen a much riskier portfolio and is trying to earn more on her money (notice 70% is now in riskier stocks versus only 30% in very safe bonds and CD\u2019s)<\/p>\n
Note: Think of Interest and Dividends as a similar concept. Just add them together to determine his total return on the investments.<\/p>\n
A<\/p>\n
B<\/p>\n
C<\/p>\n
D<\/p>\n
Type of Investment<\/p>\n
Amount of Investment<\/p>\n
Return on that Investment \u2013 this is the Rate of interest and dividends that the investment earns<\/p>\n
Total Amount Earned from all three components.<\/p>\n
Bank CD\u2019s<\/p>\n
10%<\/p>\n
5% Interest<\/p>\n
Bonds<\/p>\n
20%<\/p>\n
8% Interest <\/p>\n
Stocks<\/p>\n
70%<\/p>\n
20% Dividends and trading gains<\/p>\n
Total of all investments<\/p>\n
100 %<\/p>\n
Find the weighted average return on all 3 investments.<\/p>\n
Total $ earned on the investments was $10,000.<\/p>\n
Draw the investment Picture \u2013 use the data in Column A to draw a PIE CHART. Ok to do on paper or in Excel. If doing by hand, try and be close with the numbers.<\/p>\n
Compute the Weighted average of the investment. The weighted average is an area concept the product of the Size of the investment x the Rate that it earns. This will give you the average rate of interest earned on all three investments.<\/p>\n
Now with the average interest rate compute the total invested if the amount earned for the year was $10,000 in interest and dividends.<\/p>\n
Using answer 3 and the %\u2019s by category in the table what amount was invested in each basket? This total should equal the amount found in step 3.<\/p>\n","protected":false},"excerpt":{"rendered":"
Student __________________________ Student # ___________________ This is a weighted average concept problem. The smart investor knows that he should not put all his \u201ceggs in one basket\u201d. In this Prof. Dallis has placed a sum of money (you need to determine how much) into three different \u201cbaskets\u201d each earning a different interest rate. We did […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[10],"class_list":["post-93688","post","type-post","status-publish","format-standard","hentry","category-research-paper-writing","tag-writing"],"_links":{"self":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts\/93688","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/comments?post=93688"}],"version-history":[{"count":0,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts\/93688\/revisions"}],"wp:attachment":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/media?parent=93688"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/categories?post=93688"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/tags?post=93688"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}