Calculate the range of potential annual returns if you invested 10% in bonds and 90% in stocks. How does this range compare with the range of annual returns if you invested 10% in stocks and 90% bonds? Short paragraph answer please

From the graph, if you invest 10% in bonds and 90% in stocks, the range of potential return is given as +49.8% to -39.0% with a average of 9.9% whereas if investment is made by 10% in stocks and 90% in bonds, then the range of annual returns would become +31.2% to -8.2% with a average of 6%. Therefore, as the investment in stocks increases the average annual returns also increase.

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andromache andromache · Answer 2 · 2022-04-07T13:04:05+02:00

The range of returns in the case when it should be invested 1 should be +31.2% to -8.2%.

Calculation of the range:

Since there is 10% in bonds and 90% in stocks

The range of return that arise from the graph should be from +49.8% to -39.0%.

Since according to the given returns for stocks and bonds so the range of returns should be +31.2% to -8.2%.

Therefore, if the stock investment should be increased investment in so, The range of returns in the case when it should be invested 10% in bonds and 90% in stocks should be +31.2% to -8.2%.

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