3 years ago

Combination Fraction of Portfolio in Diversified Stocks Average Annual Return Standard Deviation of Portfolio Return (Risk)

Business

1 answer:

amm18123 years ago

3 0

Answer:

a. Sell some of her bonds and use the proceeds to purchase stocks.

Explanation:

Debt or bonds is less risky so it generates lower returns. Stock or equity comprises high risk so it offers high returns to its investors. If Rosa wants to increase her returns from 4.5% to 9.5% then he should sell some of its bonds and invest the proceeds into stocks. The lower returns on the bonds will be replaced by high returns on the stocks.

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