Formulate but do not solve the problem Me and Mrs. Garcia have a total of $200,000 to be invested in stocks, bonds, and a money market account. The stocks have a rate of return of 12%/year, while the bonds and the money market account pay 7year and 3%/year, respectively. The Garcias have stipulated that the amount invested in the money market account should be equal to the sum of 15% of the amount invested in stocks and 10% of the amount invested in bonds. How should the Garcias allocate their resources if they require an annual income of $15,000 from their investments? (Let x, y, and z denote the amount, in dollars, in stocks, bonds, and money markets, respectively) - 200,000 - 15,000 -2

Formulate but do not solve the problem Me and Mrs. Garcia have a total of $200,000 to be invested in stocks, bonds, and a money market account. The stocks have a rate of return of 12%/year, while the bonds and the money market account pay 7year and 3%/year, respectively. The Garcias have stipulated that the amount invested in the money market account should be equal to the sum of 15% of the amount invested in stocks and 10% of the amount invested in bonds. How should the Garcias allocate their resources if they require an annual income of $15,000 from their investments? (Let x, y, and z denote the amount, in dollars, in stocks, bonds, and money markets, respectively) - 200,000 - 15,000 -2

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Will Stephanie have enough funds for her investment in stocks and bonds, when needed? What will be the surplus / shortfall, if any? Given that Stephanie’s bank offers an interest rate of 6% per year, what additional amount should she have deposited as a fixed deposit in the bank so as to accumulate the amount needed for her investment in stocks and bonds when needed? 3. Suppose Stephanie deposited the $50,000 in a fixed deposit. For the shortfall, she thought of purchasing a 5-year ordinary annuity that pays an interest rate of 3.5% per annum, what annual deposit will be required to cover the shortfall? 4. Which of the two options would you recommend for covering the shortfall (Choose between the options in questions 8 and 9 above). Support your response with suitable computation.
Formulate but do not solve the problem.Kelly Fisher invested a total of $20,000 in two municipal bonds that have yields of 7% and 10% interest per year, respectively. If the interest Kelly receives from the bonds in a year is $1640, how much did she invest in each bond? (Let x and y denote the amount, in dollars, invested at 7% and 10%, respectively.) = 20,000 = 1640
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The amount the bank is willing to loan you to start your business is not enough to cover the initial investment you need to make. You need an additional $10,000. You approach an investor and ask him to invest $10,000 in your business. In return, you offer to pay him $500 out of your profits at the end of years 1-4 and an amount X at the end of year 5. The investor's annual cost of funds is 10%. How big must X be to induce him to invest in your business?
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There is an investor stating they will pay out $84,000 at the end of 4 years. In order to invest into the opportunity, you'll need to make a deposit of $10,000 to thier indicated bank account. What is the average annaul return rate. Use excel functions to indicate your steps.

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